Goldman Sachs Confirms US Probe Over Overseas Hiring Practices

Banking giant Goldman Sachs said that it is being investigated in the US for its hiring practices outside the country, confirming media reports about the Securities and Exchange Commission's (SEC) expanded anti-trust probe into the banking industry.

The Wall Street Journal earlier reported that the SEC had questioned at least five top banks based in the US or Europe, including Goldman Sachs, as the regulator is looking to expand investigation into their hiring practices in Asia.

The SEC sent letters to a group of companies including Credit Suisse Group AG, Goldman Sachs Group, Morgan Stanley, Citigroup Inc and UBS AG, seeking more information about their hiring in Asia, according to the media report.

The SEC is examining whether the banks violated anti-bribery laws by hiring relatives of powerful government officials in Asia.

According to the Foreign Corrupt Practices Act (FCPA), a US law dating back to the 1970s and intended to curb bribes to foreign government officials, companies would be guilty if they hire employees at the direction of an official at a state-run company who is able to grant business to the hiring company.

Goldman Sachs confirmed the probe in a quarterly filing on 9 May, but did not provide further details about the investigation.

Last year, US banking giant JPMorgan was accused of hiring the daughter of Wen Jiabao, the former Chinese prime minister.

Wen Ruchun, or "Lily Chang" as she was known, was paid $75,000 a month by JPMorgan through her firm Fullmark Consultants, which only had two employees, according to the New York Times.

US regulators are examining JPMorgan's habit of hiring the children of well-connected politicians in the Asia-Pacific region to allegedly help acquire business.

Reuters earlier reported that the US Justice Department and the SEC are expanding the probe into other sectors including oil and gas, telecommunications and consumer products.