$2 Billion Settlements With JPMorgan Chase In Madoff Case Likely Today


Before Bernard Madoff stole billions of dollars from his clients, getting a 150-year prison sentence, JPMorgan Chase had a chance to warn federal authorities about his Ponzi scheme but never did. The New York Times reports that today, five years after Madoff's arrest set off a panic on Wall Street and Washington, federal prosecutors imposed a $1.7 billion penalty on JPMorgan, striking a criminal settlement deal involving two felony violations. The prosecutors accusing the nation's largest bank of turning a blind eye to Madoff's fraud, will force JPMorgan to pay the sum to his victims.

Federal regulators are expected to announce their own rebuke of the bank in a civil case. JPMorgan is likely to pay some $2 billion to resolve the Madoff investigations. A so-called deferred-prosecution agreement with the U.S. Attorney in Manhattan essentially suspends for two years an indictment as long as JPMorgan admits its actions and overhauls its controls against money laundering. Deferred-prosecution agreements, not so forceful as an indictment or guilty plea, had been rarely used against a giant American bank and were typically employed only when misconduct was extreme.


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