US financial heavyweight JPMorgan Chase has been placed under formal investigation in France as part of a probe into alleged tax evasion by senior managers at investment firm Wendel.
As many as 14 Wendel executives face charges including tax evasion and insider trading over transactions conducted in 2004-2007.
The bank is suspected of acting as an accessory to tax evasion, Reuters reported, citing a court official.
In a US regulatory filing on Tuesday, JPMorgan said that in April it had been “notified that the authorities were formally investigating its role” in transactions financed by the bank on behalf of a number of Wendel managers.
Though JPMorgan provided financing for the deal from its Paris branch, it was not a tax advisor, the news agency said, citing a person familiar with the matter who was not authorized to speak publicly.
The deal was booked in France, the source added.
France has vowed to crack down on tax avoidance by individuals, offshore companies and the financial institutions that serve them, following publication of leaked HSBC client data that had been handed to the Paris authorities in 2008.
French magistrates last month ordered HSBC to post bail of 1 billion euros (US$1.13 billion) to cover potential fines if convicted on charges that it helped French clients dodge tax.
In the separate three-year investigation concerning Wendel, the former head of French employers’ organization Medef, Ernest-Antoine Seilliere, was formally accused of tax fraud last October.
His predecessor at the helm of the investment firm, Jean-Bernard Lafonta, was placed under investigation five months earlier on insider trading charges.
JPMorgan is also defending separate civil claims by some of the same Wendel managers, the bank said in a filing.
“JPMorgan Chase is responding to and cooperating with the investigation,” it said.
– Contact us at [email protected]