JPMorgan To Pay More Than $1 Billion In Madoff Deal

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."


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note