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January 8, 2014

JPMorgan pays $2.6 billion in Madoff settlements

 JPMorgan Chase will pay $2.6 billion to settle criminal and civil charges that it failed to alert authorities about warning signs that might have stopped Bernard Madoff’s Ponzi scheme long before the scam’s 2008 collapse.

In the latest of several embarrassing settlements, the nation’s largest bank Tuesday avoided prosecution by acknowledging it turned a blind eye to suspicions about Madoff’s financial operation for years — even while rushing to withdraw millions of its own funds before the financier’s scheme imploded.

“‘JPMorgan — as an institution — failed, and failed miserably,’ said Manhattan U.S. Attorney Preet Bharara at a news conference announcing the settlements. ‘The bank connected the dots when it came to its own profits, but was not so diligent when it came to its legal obligations.’

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Madoff pleaded guilty to criminal charges in 2009. He’s serving a 150-year prison term. Five former Madoff employees are now on trial on federal charges they knowingly aided the fraud. They have pleaded not guilty.

While crediting authorities for the settlements, Dennis Kelleher, head of markets watchdog Better Markets, criticized the absence of charges against bank officials. ‘Banks do not commit crimes; bankers do,’ he said.”

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Read full USA Today article here

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