Bloomberg News

Ex-JPMorgan Asia Head Said to Be Questioned by FBI About Hirings

January 17, 2014

Former Head of JPMorgan’s Asia-Pacific Business Gaby Abdelnour

Gaby Abdelnour was appointed in July 2006 to run JPMorgan’s Asia-Pacific business from Hong Kong, reporting to then-investment bank co-heads Steven Black and William Winters. Photographer: Nelson Ching/Bloomberg

Gaby Abdelnour, a former JPMorgan Chase & Co. (JPM:US) regional chief who expanded the bank’s business in Asia, was questioned by U.S. investigators about his knowledge of a hiring program at the center of an international bribery probe, a person briefed on the matter said.

Abdelnour, who stepped down as head of JPMorgan’s Asia-Pacific business in 2012 and later worked as a senior adviser at Bain Capital LLC, was met by FBI agents while traveling through a New York-area airport late last year and then interviewed, said the person, asking not to be named because the probe isn’t public. Abdelnour and the bank haven’t been accused of wrongdoing.

The meeting with a former JPMorgan executive shows how a probe of the firm’s hiring practices has escalated since the bank said in August the Securities and Exchange Commission had sought information on its employment of certain people in Hong Kong and client relationships. Authorities are examining whether JPMorgan hired people in Asia so that their relatives in government would steer business to the firm, people with knowledge with the investigations have said.

Abdelnour didn’t respond to messages left at his home in Manhattan. Several past and present JPMorgan employees in Hong Kong have retained attorneys, mainly paid for by the bank, one of the people familiar with the inquiry said.

Mark Kornblau, a spokesman for New York-based JPMorgan, the largest U.S. lender by assets, declined to comment on the inquiry. Abdelnour’s contract at Bain, a Boston-based private-equity firm, expired at the end of last year, according to a person with direct knowledge of the matter.

‘Major Build-Out’

Abdelnour was appointed in July 2006 to run JPMorgan’s Asia-Pacific business from Hong Kong, reporting to then-investment bank co-heads Steven Black and William Winters. In a 2012 memo announcing Abdelnour’s departure, Chief Executive Officer Jamie Dimon, 57, credited him for a “major build-out” of its China platform. During Abdelnour’s tenure in Asia, the firm doubled revenue and tripled its net income from the region, according to the memo.

JPMorgan ranked eighth in handling stock offerings by Chinese companies listing overseas in 2006, according to data compiled by Bloomberg. By 2010, the firm had climbed to third while nearly doubling its number of annual deals. Abdelnour helped JPMorgan set up a joint-venture securities firm in China, establish a locally-incorporated bank, and buy a stake in a trust and guarantee company.

Widening Investigation

Regulators are probing hirings to determine whether they violated the 1977 Foreign Corrupt Practices Act, which makes it illegal to provide payments or benefits to government officials to win business. U.S. scrutiny of JPMorgan began in Hong Kong and expanded to countries across Asia, looking at interns as well as full-time workers, people familiar with the inquiries have said.

JPMorgan has said in regulatory filings that it received subpoenas and requests for documents from the SEC and Justice Department, as well as inquiries from authorities in other jurisdictions. Investigators have sought information on the hiring of candidates referred by government officials and potential clients, as well as the bank’s use of consultants in the Asia-Pacific region, according to a November disclosure.

Hiring Spreadsheet

JPMorgan has said it’s cooperating. It hired law firm Paul Weiss Rifkind Wharton & Garrison LLP to examine its practices, a person with direct knowledge of the matter said in August. By that month, an internal review had flagged more than 200 hires for further scrutiny, two people with knowledge of that effort said at the time. The inquiries also uncovered a spreadsheet linking some hiring decisions to specific transactions pursued by the bank, one of the people said.

Before his appointment to Asia, Abdelnour led JPMorgan’s investment banking for corporate clients in Western Europe and oversaw all investment banking in the rest of Europe, the Middle East and North Africa. He previously worked as a mergers banker at Merrill Lynch & Co. in Hong Kong and Singapore. Prior to that, he spent 10 years at Bankers Trust where he was a managing director in the Merchant Banking Group, focusing on acquisitions, leveraged buyouts and private equity.

Bain hired him in 2012, saying his experience in Asia, Europe, the Middle East and Africa “will help the firm grow strategically and further develop its presence across the region.”

To contact the reporters on this story: Keri Geiger in New York at kgeiger4@bloomberg.net; Cathy Chan in Hong Kong at kchan14@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net; Chitra Somayaji at csomayaji@bloomberg.net


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