JPMorgan could be hit with action over Madoff

Bernie Madoff

Federal authorities are preparing to take action in a criminal investigation of JPMorgan Chase, suspecting that the bank turned a blind eye to Bernard L. Madoff’s Ponzi scheme.

The New York Times reports that the Madoff case, coming on the heels of a tentative $13bn settlement over JPMorgan’s mortgage practices, poses another major threat to the reputation of the nation’s largest bank.

Reflecting the magnitude of the investigation, prosecutors and JPMorgan have held preliminary discussions about a so-called deferred prosecution agreement, people briefed on the inquiry said. Such an arrangement would suspend criminal charges against JPMorgan in exchange for a fine, certain other concessions and an acknowledgment that the bank will face charges if it fails to behave. Prosecutors may also require JPMorgan, which has repeatedly said that “all personnel acted in good faith” in the Madoff matter, to hire an independent monitor.

While deferred-prosecution agreements are the Justice Department’s preferred tool for punishing corporate giants - they allow prosecutors to appear tough without imperiling a company’s health - they are typically deployed only when misconduct is severe. For a large American bank, they are nearly unheard-of.

But the government, the people added, has not ruled out a harsher punishment for JPMorgan Chase’s national banking subsidiary.

To access the complete New York Times article hit the link below:

JPMorgan Faces Possible Penalty in Madoff Case

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