Saturday, 31 January 2015
Last updated 1 day ago
Dec 12 2013 | 1:08pm ET
JPMorgan Chase will pay between $1 billion and $2 billion to settle a criminal investigation stemming from the Bernard Madoff Ponzi scheme.
The bank will agree to a deferred-prosecution agreement for failing to notify investors about concerns it had with Madoff's operations, according to published reports. A deal could be finalized before the end of the year.
JPMorgan, which has agreed to pay nearly $20 billion in recent months to settle a variety of investigations and lawsuits unrelated to the Madoff fraud, was Madoff's primary banker for decades.
At issue is JPMorgan's failure, just prior to the collapse of Madoff's $65 billion Ponzi scheme, to file a suspicious activity report with U.S. regulators. The bank had notified British regulators of its concerns about a month before Madoff's arrest, five years ago yesterday.
Federal law requires banks to file SARs when they "detect certain known or suspected violations of federal law or suspicious transactions."
The proceeds of the settlement would go towards restitution for Madoff's victims, who lost $17.5 million in the fraud. The bank will also settle with the U.S. Office of the Comptroller of the Currency and pay a second set of fines.
The agreement requires JPMorgan to acknowledge the truth of the government's case against it, in exchange for the government's agreement not to indict. The U.S. Attorney's Office in Manhattan is expected to accuse the bank of a "programmatic violation" of the Bank Secrecy Act.
"You read about Madoff in the paper the other day," JPMorgan CEO Jamie Dimon said yesterday, "We have to get some of these things behind us so we can do our job."
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…