Princelings and Patek Philippe watches on junior staffers are more common on Wall Street than many want to believe.
Jamie Dimon 's bank is facing a $200 million fine for its hiring practices overseas, according to a Wall Street Journal report. Notably, it's accused of hiring the son of China's commerce minister, Gao Hucheng, as it simultaneously sought business in that country, the Journal said.
According to the Journal's story, JPMorgan took on more than 200 candidates through a program dubbed the "Sons and Daughters" initiative, although it isn't clear what the purpose of the program is.
JPMorgan declined to comment to CNBC. The Journal report said the bank is expected to admit guilt, but not to be charged criminally. Word of the JPMorgan investigation first surfaced in 2013 , although reports have indicated that the bank believed its plans fell within the bounds of legally accepted behavior.
Regardless, many who follow China's economic culture closely say the things which JPMorgan stands accused of are common practice on Wall Street and beyond.
"Many firms have taken to hiring the children of senior government officials," Foreign Affairs magazine reported in April of last year, adding that U.S. firms are sometimes "even paying their tuition at Western universities."
Past reports from the Journal focused on emails between bank staffers who mention needing to "leverage" a junior employee's father. The staffer in question, named Gao Jue, was called "immature, irresponsible and unreliable," but was apparently indispensable to JPMorgan Chase, the Journal reported. He's among the so-called Chinese Princelings — children of the wealthy and connected in authoritarian China — who are sought by Wall Streeters eager to have a deeper connection to potential clients in the world's second-biggest economy.
"You hire Princelings or watch the business go to non-U.S. companies who aren't prosecuted under" the Foreign Corrupt Practices Act, Erik Gordon, clinical assistant professor at the University of Michigan's Ross School of Business, told CNBC.
At a time when Wall Street is increasingly under the gun to produce profits , a little quid pro quo can go a long way — so long as it doesn't earn banks a big fine in the process.
A Wall Street banker at another firm who asked to not be quoted said that Gao Jue's trip through Wall Street from China is a "well-worn path," and added that it's common at many firms for word to circulate about which junior staffers or interns are of international aristocracy, and are to be afforded different treatment.
That source told CNBC of one large Wall Street bank that had a junior staffer who came from a prominent Chinese family whose business was considered desirable, and who had a habit of wearing a different Patek Philippe watch to the office for each day of the week. Such timepieces roughly range in price from $20,000 to more than $100,000.