SEC widens probe into hiring practices at banks

• Goldman Sachs (NYSE:GS), Deutsche Bank (NYSE:DB) and Credit Suisse (NYSE:CS) have reportedly joined JPMorgan (NYSE:JPM) on the list of banks being investigated for their hiring practices in China. Morgan Stanley and Citigroup are also being scrutinized.
• The SEC is looking at whether the banks breached laws relating to foreign bribery by recruiting the family members of the well-connected in order to win business.
• The probe into JPMorgan has uncovered an email from a senior JPMorgan executive in Hong Kong saying that the bank's recruitment program for family members of senior government and other officials - called Sons and Daughters - had an almost "linear relationship with winning assignments to advise Chinese companies." A spreadsheet tracks JPM's record for converting hires into business deals.
• However, documents that JPMorgan has handed over as part of the investigation don't indicate that executives at the bank's New York HQ knew of the recruitment strategy.