Bernie Madoff’s legacy is still showing the debris left behind in his wake as JP Morgan is approaching a settlement of $2 billion with the federal government. It will be the cost for JP Morgan to ignore signs of the Ponzi scheme. One may wonder how paying $2 billion “resolves suspicions,” but don’t think about it too much, because it doesn’t.
The breakdown of the deal dictates that JPMorgan will pay in excess of $1 billion to New York City prosecutors and the rest will go to the Office of the Comptroller of the Currency (OCC) along with an office in the Treasury Department that investigates money laundering. Lastly, a portion will go to Madoff victims.
Following the 2009 conviction of Bernie Madoff, it was found that JP Morgan and other banks ignored signs of fraud so as to continue to earn the generous fees the con artist paid for investing with him.
If this penalty seems excessive, it should be noted that the CEO of JP Morgan, Jamie Dimon, still remains in power through all of this. This is in spite of the fact that Mr. Madoff disclosed to the government during his investigation that the bank worked to ensure that the OCC would not be able to gain access to vital information regarding the relationship between the bank and his fradulent firm.