JPMorgan Nears Madoff Settlement

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.


In Depth

Humble in Hofstra...One Debate an Election Can Make

Sep 26 2016 | 10:20am ET

Tonight's U.S. Presidential debate, infamously coined the “Humbling in Hofstra...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...