JPMorgan has agreed to pay $264 million to the US authorities for resolving its nepotism case in China. The bank allegedly hired the kith and kin of Chinese officials in lieu of favors. The bank was being probed by the US Securities and Exchange and the Justice Department for potential violation of the US Foreign Corrupt Practices Act.

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Apart from JPMorgan, several other banks such as Goldman Sachs and HSBC have also been scrutinized in the recent years by the US authorities. However, JPMorgan is the first major bank to reach settlement for such hiring practices.

The bank did not deny or admit the charges. Nevertheless, one of its Hong Kong units admitted to making reciprocal hiring for gaining investment business. The bank said that such hiring program was axed in 2013. It also claimed that appropriate actions were taken against those involved in the case.

The Justice Department is set to receive $72 million from the settlement, while SEC will receive $130 million. The US Federal Reserve will receive $61.9 million out of the settlement. The regulators held that the bank "corruptly influenced government officials" with its practices.

Andrew Ceresney, director of the SEC's enforcement division, said, "JPMorgan engaged in a systemic bribery scheme by hiring children of government officials ... who were typically unqualified for the position on their own merit."

The regulators have not imposed any criminal charges against JPMorgan or any of its employees. The SEC held that the internal controls instituted by JPMorgan were too weak to deny any of such hiring requests made. 

Tagsjpmorgan, Goldman sachs, HSBC