Bloomberg: JP Morgan's Relationship with Shamkhani's Son's Company Under Investigation

Bloomberg reported that the U.S. Treasury Department is investigating the relationship between JP Morgan and a hedge fund said to be part of a network overseen by Hossein Shamkhani, the son of Ali Shamkhani. Bloomberg noted on Friday, December 2, citing informed sources who wished to remain anonymous, that the investigation is still in its early stages. According to the report, the Treasury Department is examining whether the New York-based bank complied with all relevant laws and regulations when accepting 'Ocean Leonid' as a client. The company has recently been suspended by the Dubai Free Trade Zone. The Persian section of Voice of America sought further information from the Treasury and Justice Departments. The Justice Department referred Voice of America to the Treasury, which declined to comment. Bloomberg previously reported on November 3, 2023, about 'Ocean Leonid' as a hedge fund overseen by Hossein Shamkhani with offices in London, Dubai, and Geneva. In addition to JP Morgan, the Dutch bank 'ABN AMRO' and the UK-based financial services company 'Marx Group' have also been among the lenders to this company overseen by Ali Shamkhani's son. Spokespersons for JP Morgan and 'Ocean Leonid' declined to comment on Bloomberg's report. Hossein Shamkhani also refrained from responding to a written request sent to his lawyer. Meanwhile, one representative of 'Ocean Leonid' had previously categorically denied any involvement or oversight by Ali Shamkhani's son over the company in an interview with Bloomberg. A lawyer for Hossein Shamkhani had also previously denied any connection between his client and 'Ocean Leonid'. Informed sources told Bloomberg that JP Morgan is not required to sever ties with Hossein Shamkhani or 'Ocean Leonid' as neither is on the U.S. sanctions list. They added that the Treasury is primarily interested in Hossein Shamkhani's activities, although it is also examining the possibility of JP Morgan's non-compliance with relevant laws and regulations. They noted that the U.S. Federal Reserve is also investigating the potential exposure of Western financial firms to Iran's oil trade network. According to Bloomberg, a Federal Reserve spokesperson declined to comment on this matter. The U.S. requires banks operating within its jurisdiction to conduct thorough due diligence on their clients to ensure they are not involved in money laundering or terrorist financing and to report any suspicious activities to the relevant authorities. The Office of Foreign Assets Control of the Treasury and the Federal Reserve are among the U.S. entities tasked with ensuring that financial institutions have adequate systems in place to fulfill these duties. Ali Shamkhani, the father of Hossein Shamkhani, is a commander of the Islamic Revolutionary Guard Corps and an advisor to Ali Khamenei, the leader of Iran, who was sanctioned by the Office of Foreign Assets Control of the Treasury in January 2020 for playing a 'key role' in the Islamic Republic's defense policies and assisting in political, intelligence, social, and economic activities based on Khamenei's directives.