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January 8, 2014

JPMorgan strikes deal over Madoff

JPMorgan Chase will pay more than $2 billion to settle civil and criminal charges that it aided Bernard Madoff’s infamous Ponzi scheme by ignoring warning signs that the notorious financier and investment adviser was swindling his clients.

Under the deal, announced by federal authorities on Tuesday, law enforcement officials agreed to defer any criminal prosecution of the bank after it acknowledged the facts of the government’s case and agreed to pay $1.7 billion to Madoff’s victims. No individuals will be charged.

U.S. Attorney Preet Bharara said JPMorgan failed to take its anti-money laundering responsibilities seriously and in doing so helped facilitate one of the greatest financial frauds in U.S. history.”

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In a statement Tuesday, a spokesman for the bank said it does not believe that any JPMorgan Chase employee knowingly assisted Madoff’s Ponzi scheme, noting that the fraud was unprecedented and affected thousands of people, including the bank.

“’We recognize we could have done a better job pulling together various pieces of information and concerns about Madoff from different parts of the bank over time,’ spokesman Brian Marchiony said.

Critics of the bank were not quite as forgiving.

“’Banks do not commit crimes; bankers do,’ said Better Markets President Dennis Kelleher, a group that advocates for tougher rules for Wall Street. ‘Until individuals, including executives, are held personally liable, fined and jailed, the crime spree will continue.’”

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Read full Politico Pro article here (subscription required)

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