“Yesterday, the New York Times reported that JPMorgan had dropped out of the running to underwrite a potential $1 billion share sale by a Chinese chemical company, while U.S. authorities are probing the bank’s hiring practices in China. Last week, Bloomberg News reported that agents from the Federal Bureau of Investigation had questioned a former head of JPMorgan’s Asia-Pacific business after stopping him in a New York-area airport. The government is probing whether JPMorgan hired the children of China’s elite so that their powerful relatives in government would steer business to the bank.

“U.S. officials are trying to determine whether JPMorgan violated the 1977 Foreign Corrupt Practices Act, which makes it illegal to bribe foreign government officials in exchange for getting business. The investigations, which include probes by the Securities and Exchange Commission and the Justice Department, are in uncharted territory in one notable respect, which I haven’t seen anyone else point out yet: Neither the Justice Department nor the SEC has ever used this statute against a bank, according to annual lists of cases published on the Justice Department and SEC websites. Yet they routinely bring such cases against large companies in other industries.

“Sometimes the Justice Department even gets criminal convictions against companies for violations, including one this month against an Alcoa Inc. subsidiary that pleaded guilty to paying bribes to officials in Bahrain and agreed to pay $384 million in criminal and regulatory penalties. As for banks, there hasn’t even been a nonprosecution agreement or a deferred-prosecution agreement over FCPA violations.”

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