A case by Hong Kong’s ICAC against an individual on bribery charges is another example of Asia-Pacific regulators targeting the person as well as the institution.
The decision by Hong Kong’s Independent Commission Against Corruption (ICAC) to bring charges against a former JPMorgan executive for bribery marks an interesting regulatory trend: criminal charges against individuals for banking crime. Catherine Leung Kar-cheung, who rose to be vice-chair of JPMorgan’s investment banking business for Asia-Pacific, has been charged with having bribed the chairman of a logistics company by promising to give his son employment at the bank. This was part of what became known as JPMorgan’s ‘sons and daughters’ campaign, through which the bank hired about 200 friends and relatives of executives at Asian companies, nearly half of them connected to Chinese state-owned firms, between 2006 and 2013. The bank was investigated by US authorities and admitted to violating the Foreign Corrupt Practices Act in a 2016 settlement through which it paid $264 million to resolve civil and criminal charges. At least 20 people were disciplined or fired, and Leung was ousted in 2015 along with fellow vice-chair Todd Marin. On Thursday, JPMorgan told Euromoney: “This is a historical case, which JPMorgan reached agreement on and settled in 2016. “We strengthened our compliance procedures and controls around hiring and reinforced the high standards of conduct expected of our people.” Leung could not be reached through LinkedIn messaging on Friday. Individual The ICAC charge is against Leung as an individual, not JPMorgan. This is an interesting step, because the bribery alleged does not take the form of an offer of money, but employment. And the purpose of it, as alleged, was to benefit the firm through an IPO mandate, rather than Leung herself, although arguably she would have received a greater bonus as a consequence of winning mandates such as these. She appeared in a Hong Kong magistrates’ court on Monday, May 20, and was released on bail of HK$20,000. Hong Kong is not the only regulator to get personal. In Australia, ASIC’s cartel case against ANZ, Citi and Deutsche has shaken the industry because its action includes criminal proceedings against six individuals, not just the banks they work for, despite being in a highly technical and arguably opaque area of securities law. And in the 1MDB case, the US Department of Justice has sought to charge individuals, most obviously ex-Goldman bankers Tim Leissner and Roger Ng, and – in a more surprising step, given the modest level of evidence outlined in the charge sheet – current Goldman banker Andrea Vella; now on leave. Executed China, of course, has had a rather more extreme approach to these matters. When Agricultural Bank of China IT director Wen Mengjie was found guilty of accepting bribes to approve bank purchases of computer equipment, he was executed in 2007.