NEW YORK–JPMorgan Chase & Co, already beset by costly legal woes, will pay more than US$2.5 billion for ignoring obvious warning signs of Bernard Madoff's massive Ponzi scheme, authorities said yesterday.
The nation's largest bank will forfeit a record US$1.7 billion to settle criminal charges, plus pay an additional US$543 million to settle civil claims by victims. It also will pay a US$350 million civil penalty for what the Treasury Department called "critical and widespread deficiencies" in its programmes to prevent money laundering and other suspicious activity.The bank failed to carry out its legal obligations while Madoff "built his massive house of cards," George Venizelos, head of the FBI's New York office, said at a news conference.
"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," he said.Madoff banked at JPMorgan through what court papers referred to as the "703 account." In 2008, the bank's London desk circulated a memo describing JPMorgan's inability to validate his trading activity or custody of assets and his "odd choice" of a one-man accounting firm, the government said.
AP