Tuesday, 22 July 2014
Last updated 6 hours ago
Jan 7 2013 | 11:01am ET
JPMorgan Chase has until Friday to cough up documents sought by federal investigators, or face threatened if unspecified consequences.
The U.S. Treasury Department's inspector general ordered the bank to hand over documents sought by the Office of the Comptroller of the Currency by Jan. 11. It faces "further action" by Inspector General Eric Thorson if it fails to do so, he warned.
Refusal to produce the documents for OCC's probe of the Bernard Madoff Ponzi scheme "will have to be seen as a continuing purposeful impediment to the authority of the OCC," Thorson wrote.
JPMorgan has said the documents sought are protected by attorney-client privilege.
"This dispute does not go to the merits of the matter, but it does raise an important issue of principle: Whether we and other banks, large and small alike, have the fundamental right long recognized in this country to communicate freely with and seek confidential guidance from their lawyers," JPMorgan spokeswoman Jennifer Zuccarelli said.
Thorson said that the OCC would be unable to do its work if banks could withhold documents on the basis of attorney-client privilege.
The spat between the Treasury and JPMorgan Chase is the first word of an OCC probe into the Madoff fraud, and the second time in three months that the bank has had an attorney-client privilege run-in with a regulator. It won last time, in November, when a federal judge ruled it did not have to turn over e-mails to the Federal Energy Regulator Commission.
JPMorgan was sued for $19 billion by the trustee in the Madoff case, a claim that was dismissed. The trustee, Irving Picard, is appealing that ruling.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…