“J.P. Morgan Chase & Co. officials won’t be penalized as part of a deal the largest U.S. bank is negotiating with the Justice Department over alleged failures to warn about Bernard Madoff‘s massive fraud, said people close to the talks.
“Manhattan U.S. Attorney Preet Bharara and U.S. banking regulators intend to announce a total of more than $2 billion in fines this week, these people said. But all fines will be paid by the company as opposed to individuals, these people added.
“The decision contrasts with the approach taken last year in the case of J.P. Morgan’s “London whale” trading debacle, where two former traders were charged with hiding losses on runaway bad bets that cost the bank more than $6 billion. The ex-traders are fighting the charges. Numerous ex-Madoff employees also face trial or have pleaded guilty in connection with the Ponzi scheme that Mr. Madoff acknowledged after his firm collapsed in 2008.
“New York-based J.P. Morgan is expected to sign a so-called deferred prosecution agreement with the Justice Department where it will acknowledge that it didn’t have the proper systems in place to catch Mr. Madoff, and that various procedures designed to root out and report such suspicious behavior were flawed, said people close to the talks. An announcement is expected as early as Tuesday.”
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