J.P. Morgan's alleged failure to file a key federal document more than five years ago is emerging as a critical component of a Justice Department investigation into whether the bank provided adequate warnings about the fraud of Bernard Madoff, people close to the probe said.
The Wall Street Journal reports that Manhattan U.S. Attorney Preet Bharara's office is examining why J.P. Morgan didn't provide U.S. regulators with a formal 'suspicious activity report' raising concerns about Madoff - despite having done so with a U.K. agency more than a month before Madoff's arrest, said the people close to the probe. Madoff had a two-decade-long banking relationship with J.P. Morgan before his arrest in December 2008.
J.P. Morgan is negotiating a settlement with the U.S. attorney's office that will likely include a deferred-prosecution agreement and a fine relating to alleged inadequate warnings about Madoff, these people said.
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J.P. Morgan Is in Talks With U.S. Over Madoff Warnings (subscriber content)
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