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January 8, 2014

JPMorgan Is Penalized $2 Billion Over Madoff

“Two men who occupy coveted roles in Manhattan’s power elite, one the city’s top federal prosecutor and the other its top banker, sat down in early November to discuss a case that was weighing on them both.

Preet Bharara, the United States attorney in Manhattan, and Jamie Dimon, the chief executive of JPMorgan Chase, gathered in Lower Manhattan as Mr. Bharara’s prosecutors were considering criminal charges against Mr. Dimon’s bank for turning a blind eye to the Ponzi scheme run by Bernard L. Madoff. Mr. Dimon and his lawyers outlined the bank’s defense in the hopes of securing a lesser civil case, according to people briefed on the meeting.

“But at the cordial meeting in Mr. Bharara’s windowless conference room lined with law books, the prosecutors would not budge. Mr. Bharara — flanked by his own lieutenants, including Richard B. Zabel and Lorin L. Reisner — made it clear that he thought the wrongdoing was significant enough to warrant a criminal case.”

***

“Yet the comptroller’s office also noted on Tuesday that its investigation remained open. In a statement, it declared: ‘We will continue our oversight efforts and take further action as warranted.’

“And critics of Wall Street are unsatisfied, noting that Mr. Bharara’s office opted to defer prosecution and did not charge any JPMorgan employees with wrongdoing.

“’Banks do not commit crimes; bankers do,’ said Dennis M. Kelleher, the head of Better Markets, an advocacy group.”

***

Read full New York Times article here

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