|
 The settlements would fault the bank for turning a blind eye to
warning signs about Madoff's firm, which was revealed in December
2008 to be the operator of a massive Ponzi scheme, the sources said.
One source said JPMorgan employees in New York, through internal
communications at the bank, expressed confusion about details of
Madoff's activity and his fund's returns, but the bank decided not
to file a suspicious activity report with U.S. regulators, despite
the fact that its London office had filed a similar report with UK
authorities.
JPMorgan spokesman Mark Kornblau declined to comment.
The criminal component to the case was first reported by the New
York Times on Wednesday.
 Madoff was convicted in 2009 of defrauding thousands of investors
and is serving a 150-year prison sentence. JPMorgan has been accused
of ignoring warning signs that Madoff's business was a fraud, often
to win more fees and commissions.
Irving Picard, a trustee for Madoff's victims, accused JPMorgan of
ignoring warning signs about Madoff and sued the bank for $19.9
billion. But a judge tossed all but $425 million of Picard's
lawsuit. An appeal of the ruling by Picard to the U.S. Supreme Court
is pending.
JPMorgan has said in the past there was no evidence showing that
anyone at the bank knew of Madoff's elaborate scheme. The suspicious
activity report the bank filed in London, two months before Madoff
was arrested, described his investment performance as "too good to
be true," according to Picard's lawsuit.
The settlement with federal prosecutors in Manhattan would include
more than $1 billion in penalties to resolve the criminal case,
which would specifically cite JPMorgan for abetting Madoff's fraud.
Jennifer Queliz, a spokeswoman for U.S. Attorney Preet Bharara,
declined to comment.
[to top of second column] |
The rest of the fines would be imposed by Washington regulators,
including the Office of the Comptroller of the Currency and the
Federal Reserve, for failures in JPMorgan's anti-money laundering
policy related to the Madoff case, one of the sources said.
The sources said the settlement could come as early as this month.
The original goal, one of the sources said, was to finalize it
before the Christmas and New Year's holidays.
JPMorgan, the biggest U.S. bank by assets, recently reached a $13
billion settlement in connection with a range of government claims
over bad mortgage securities and struck another deal with regulators
to pay about $1 billion for its "London Whale" derivatives trading
debacle.
(Reporting by Emily Flitter; additional reporting by David Henry and Nate Raymond;
editing by Steve Orlofsky)
[© 2013 Thomson Reuters. All rights
reserved.] Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
