Tuesday, January 07 17:12:59
JPMorgan Chase will pay more than $2 billion of penalties to settle charges by U.S. federal authorities that it failed to report suspicious activity involving Bernard Madoff's Ponzi scheme.
As part of the deal, JPMorgan is admitting it violated laws requiring it to monitor customer activity for money laundering during its two decade relationship with Madoff, authorities said on Tuesday.
The penalties resolve another government probe for the largest U.S. bank, which faces at least eight other government investigations covering everything from its hiring practices in China to whether it manipulated the Libor benchmark interest rate. In November, JPMorgan agreed to a $13 billion settlement with the U.S. government over the bank's mortgage bonds.
The deal includes a two-year deferred prosecution agreement and settles outstanding probes by multiple bank regulators into failures in JPMorgan's anti-money laundering policies. The bank also agreed to improve its controls.
JPMorgan is paying a $1.7 billion penalty to settle with the Department of Justice, and another $350 million to settle with the U.S. Office of the Comptroller of the Currency.
Shares of JPMorgan were down 1.4 percent at $58.19 in midday trading.
"We recognize 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," JPMorgan spokesman Joe Evangelisti said in an email. "We filed a Suspicious Activity Report (SAR) in the UK in late October 2008, but not in the U.S."
He added: "We do not believe that any JPMorgan Chase employee knowingly assisted Madoff's Ponzi scheme."
As part of the deal, the bank agreed not to apply for a tax deduction or tax credit for the $1.7 billion payment. The $1.7 billion will go to the victims of Madoff's fraud, according to Tuesday's announcement.