JP Morgan vs Madoff: Settlement to Cost $2 Billion

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.

According to the New York Times, along with the payout, criminal and civil settlements also include a deferred prosecution agreement, which is a suspension of an indictment for criminal action. This is all being done with the additional agreement from the bank that they acknowledge the government’s case as well as agree to change the behavior that led to this.This would be heartening, except this is not a lone incident of bad behavior. This company was caught in 2013 for having two sets of books to cover trading losses, and in 2012 they settled a class action lawsuit for having foreclosed on deployed veterans who were current on their mortgages. If investors were married to JP Morgan Chase & Co., a good therapist would be obligated to recommend divorce for how abusive the relationship has been.

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.

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2 responses to “JP Morgan vs Madoff: Settlement to Cost $2 Billion

  1. Pingback: 5 Years ago: Bernie Madoff Ponzi scheme that cost investors over $17 billion | Alpha Banker·

  2. Pingback: 5 Years ago: Bernie Madoff Ponzi scheme that cost investors over $17 billion | Alpha Career·

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