Friday, 6 March 2015
Last updated 5 hours ago
Dec 10 2013 | 12:10pm ET
JPMorgan Chase could strike a deal with federal prosecutors before the end of the year over its failure to notify regulators about concerns it had with Bernard Madoff's operations.
A deferred-prosecution agreement between the bank and the U.S. Attorney's Office in Manhattan could come within the next few weeks or early next year, The Wall Street Journal reports. Such a deal would spare JPMorgan criminal charges if it does not violate the agreement for a certain period.
Prosecutors are investigating why JPMorgan did not file a suspicious activity report about Madoff with U.S. regulators just before Madoff's $65 billion Ponzi scheme collapsed in December 2008. The bank, which had worked with Madoff for two decades, had notified British regulators of its concerns about a month before Madoff's arrest.
On Oct. 28, 2008, JPMorgan warned the U.K.'s Serious Organised Crime Agency that Madoff's returns "appear too good to be true," and that "as a result" of its "concerns," the bank had filed a redemption notice from one Madoff feeder fund and was preparing to redeem from two others.
Suspicious activity reports are required when banks "detect certain known or suspected violations of federal law or suspicious transactions." Some 1.6 million such reports were filed last year, with JPMorgan itself accounting for more than one-tenth of the total.
The probe is part of a larger investigation into control failures at JPMorgan, which has denied knowing that Madoff was running a scam.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…