Monthly Archives: May 2016

Bribing foreign officials

JPMorgan Chase hired hundreds of friends and relatives of potential clients in order to win business in China, an international bribery scheme, federal officials said Thursday, that netted the Wall Street bank more than $100 million.

JPMorgan agreed to $264 million in fines to settle civil and criminal charges, an amount discounted in return for the bank’s cooperation with the investigations. The bank, which was accused of violating the Foreign Corrupt Practices Act, acknowledged wrongdoing as part of the settlement, an usual admission in such cases.

Facing a competitive business environment, JPMorgan hired candidates — who were often unqualified — for internships and full-time jobs at the prestigious bank, the largest in the U.S. by assets. In some cases, the applicants were referred by Chinese government officials and the employment would be extended if the relationship generated enough revenue, according to court documents.

The settlement follows a multi-year, high-profile investigation into what law enforcement officials expect to be several cases examining the conduct of U.S. banks operating in China and other parts of Asia. The JPMorgan case shows that this may “be an industry wide problem,” said Andrew Ceresney, director of enforcement at the Securities and Exchange Commission. “We do not expect this to be the last action related to this sweep.”

JPMorgan said it has made improvements to its hiring practices and was pleased that its cooperation was recognized by law enforcement officials. “The conduct was unacceptable. We stopped the hiring program in 2013 and took action against the individuals involved,” JPMorgan said in a statement.

The therapy business

Although the near-term future looks bleak for Democrats, things are looking brighter for others. Like those in the therapy business.

CNBC reports an online therapy start-up called Talkspace has seen a seven-fold spike in its traffic since about 7 p.m. on election day. The firm, made up of a national network of about 1,000 licensed therapists, provides its therapeutic services via text messaging and online video with plans starting at $32 a week.  For some people in these uncertain post-election times, that’s a bargain.

At Talkspace, they can barely keep up with the increased demand.

“We’re trying to get help to as many people as possible but unfortunately because of the load our response time is a little slower than usual,” The company’s chief executive told CNBC. “People are very aware that this is a long term concern and problem which won’t go away soon.”

Where’s the majority of the hand-wringing occurring? Mostly in the New York area of course, where Democrats seem to be even bluer than the color on an electoral map. However, almost 20 percent of the traffic is also coming from other regions…including Republican-leaning red states.

According to the company’s therapists, patients are experiencing extreme emotions from “profound sadness” to “anxiety and self-esteem issues.” One client became bedridden due to the anxiety caused by the election and others are turning to drink to relieve their stress. There’s been a “dramatic rise” in fears from the LGBT community too.

CNBC’s Catherine Clifford predicts that business should be booming for Talkspace for a while. “The coming weeks, months, and even years are likely to be tumultuous,” she writes.

Shopping habits

The surprising presidential election results may have changed a great many things: your dinner table conversations, for example, and the kinds of posts in your Facebook feed. But executives at major retailers say they’re betting that the political climate will do little to alter your shopping habits this holiday season.

“We haven’t really seen any noticeable change in sentiment in our customers,” said Greg Foran, Walmart’s U.S. chief executive, on a Thursday conference call when asked whether the election would have an effect on the business.

Foran’s comments echo what Brian Cornell, the chief executive of Target, said Wednesday when asked a similar question. “We remain very optimistic about the holiday season,” Cornell said, referencing economic factors such as a low unemployment rate.

Both retailers reported relatively upbeat earnings results this week, adding to evidence that the retail industry is headed into the holiday shopping season with a tail wind.

In its U.S. division, Walmart saw a 1.2 percent increase in comparable sales, a measure of sales online and at stores open more than a year. The uptick came as the retailer did a better job of keeping store shelves well-stocked, and as its online sales heated up. This time around, ­e-commerce accounted for a greater share of the growth on this metric than in any previous quarter.

 Still, profit declined as the big-box chain invests in raising wages for its workers and in building out technology and infrastructure to strengthen its digital business.

Walmart’s revenue was $118.2 billion, up 0.7 percent from the same period last year. (Adjusting for currency fluctuations, revenue was $120.3 billion.) Profit slipped 8.2 percent, to $3.03 billion, or 98 cents a share.