JPMorgan to pay $2.6 billion to US government, victims related to Madoff Ponzi scheme
New York's JPMorgan Chase & Co. agreed to pay $2.6 billion to the US government and Bernard Madoff victims to settle allegations that the bank failed to tell authorities about its suspicions of fraud at Madoff's fund.
Reuters, citing government prosecutors, said that JPMorgan managed to cut its exposure to Madoff's fund to minimize its losses in what ended up being a $17.3 billion Ponzi scheme. The bank, however, never shared its doubts with US authorities.
JPMorgan's $1.7 billion settlement with the Department of Justice, part of the larger deal announced Tuesday, is the largest forfeiture a bank has ever had to pay to resolve anti-money laundering violations. The deal does not include charges against individuals, the report said.
The settlement is only the latest of JPMorgan's legal difficulties. In November, the bank agreed to a $13 billion settlement with the US government over its mortgage bonds. JPMorgan still faces at least eight other government probes, covering everything from its hiring practices in China to whether it manipulated the LIBOR benchmark interest rate, Reuters said.