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JPMorgan pays out $2.6bn over Madoff failings

by Daniel Grote on Jan 08, 2014 at 07:43

JPMorgan pays out $2.6bn over Madoff failings

JPMorgan Chase has agreed to pay $2.6 billion (£1.6 billion) over its failings related to Bernard Madoff’s Ponzi scheme, according to reports.

It will pay $1.7 billion to the Department of Justice, $350 million to the Office of the Controller of the Currency, $325 million to Irving Picard, the trustee for the Madoff bankruptcy, and $218 million to plaintiffs in class-action lawsuits.

US attorney for Manhattan Preet Bharara said JPMorgan had concerns about Madoff for more than a decade but failed to inform US authorities.

New revelations show that JPMorgan had concerns about one of its private clients’ transactions with Madoff dating back to 1994, but allowed them to continue, only filing a suspicious activity report in 2008 after Madoff’s arrest. And twice, JPMorgan’s asset management arm declined to invest in Madoff funds, with one manager claiming returns were ‘possibly too good to be true’, but failed to relay those suspicions to its anti-money laundering team.

Assistant FBI director George Venizelos said: ‘JPMorgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards.

‘Today, JPMorgan finds itself criminally charged as a consequence. But it took until after the arrest of Madoff, one of the worst crooks this office has ever seen, for JPMorgan to alert authorities to what the world already knew.

JPMorgan said: ‘We recognise we could have done a better job pulling together various pieces of information and concerns about Madoff from different parts of the bank over time.

‘We do not believe that any JPMorgan Chase employee knowingly assisted Madoff’s Ponzi scheme.’

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