FORTUNE — J.P. Morgan’s (JPM) top dealmaker in China, Fang Fang, a media-friendly executive with close ties to the Communist Party, has stepped down from his role amid the U.S. government’s investigation into the bank’s hiring practices in Asia, as reported by the Wall Street Journal on Sunday. But are more resignations in China coming?
Fang became a vulnerable figure after investigators found emails linking him and the hiring of the son of China Everbright Group’s chairman, the Journal said. J.P. Morgan was seeking to do more business with the Chinese bank.
U.S. investigators are determining whether J.P. Morgan and other U.S. banks operating in China violated the Foreign Corrupt Practices Act by hiring the sons and daughters of China officials in order to win business. Countless more emails like Fang’s surely exist, and they will continue leaking into the press as the government builds its case. J.P. Morgan, in reaction to the heat, recently withdrew from underwriting China Everbright’s $2 billion listing in Hong Kong.
Fang started at J.P. Morgan in 2001, rising to become CEO of J.P. Morgan’s Investment Bank in China before adding the role of vice chairman of investment banking in Asia in 2009. He cultivated relationships with Communist Party members. In 2008 he joined the Chinese People’s Political Consultative Conference, the private citizens’ advisory group that works with officials to shape policy. “It opens doors to the country’s top leaders,” he said of the CPPCC, in a 2011 interview with the Financial Times.
Fang also cultivated relationships with key young people. Fang serves as the chairman of a Hong Kong society club called Hua Jing Society, founded in 2011 by a group of young professionals who were born in Mainland China, educated abroad, and started their careers in Hong Kong. The literal meaning in Chinese is “elite Chinese.” Chinese apparel brand Li Ning’s founder Li Ning and popular actor Leon Lai Ming serve as honorary chairmen.
What’s unclear following Fang’s resignation is what role others played in J.P. Morgan’s hiring of China’s so-called princelings. J.P. Morgan’s China operations are led by an executive named Zili Shao, a former lawyer who joined the bank in 2009. J.P. Morgan China’s head of communications Lisa Liang previously declined to comment on Fortune’s questions about the role he played in hiring of Chinese officials’ children.
The Securities and Exchange Commission has opened investigations over the past year into almost all the big American banks, including Morgan Stanley (MS), Goldman Sachs (GS), and Citigroup (C), concerning their hiring practices in China. There has already been fallout. UBS suspended two bankers, including its top IPO banker in China, over hiring concerns after an internal investigation found the executives were involved in hiring the daughter of the chairman of a Chinese chemicals company looking to go public.
Meanwhile, the investigation at J.P. Morgan keeps growing. Late last year, J.P. Morgan’s former Asia-Pacific head was stopped at JFK Airport in New York for questioning about the bank’s hiring programs, according to Bloomberg. And last month the New York Times reported that a top Chinese regulator asked J.P. Morgan’s CEO Jamie Dimon to hire a young family friend two years ago. The man now works at the bank.
As the investigation into U.S. banks in China drags on, neither Dimon, Fang, nor any individuals at J.P. Morgan are said to be under investigation themselves. But as U.S. investigators press on, more executives could find themselves pressured out.