JP Morgan Pays Multi Billion Dollar Penalty for Madoff Failures

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Category: Business/Financial News

Published on Wednesday, 08 January 2014 06:20

Written by Janet Walker

JP Morgan Chase has agreed to pay penalties of nearly 2.6billion dollars for their role in failing to accurately assess the solvency and refusing to file suspicious activity reports in the case of former ponzi scheme mastermind Bernie Madoff.

“JP Morgan failed and failed miserably,” said Preet Bahara, U.S. Southern District of New York Attorney, in a press conference.

Madoff, who ran the most successful ponzi scheme in history, was deeply connected to JP Morgan and used the Wall Street firm as his primary financial source over many years. He was able to launder, “through a single set of accounts” due to an “inadequate and ineffective anti-money laundering program.”

Madoff, whose hedge fund boosted high profile clientele, including many celebrities, sports organizations, and private investors, who billed himself as an investment advisor would advise his clients to invest funds into his scheme, guaranteeing profits so astronomical that key bank officials issued “red flag” warnings.

JPMorgan Chase agreed to the terms issued and admitted that in spite of its own reservations over Madoffs “too good to be true” profit margins, it refused to invest its clients in his funds, and pulled its own platform feeder funding in an effort to protect its clients.

JP Morgan was concerned enough to file a “report in the UK  of suspicion of fraud” but failed again to file a “single suspicions activity report in US.“

The penalties assessed against JPMorgan for its gross failures in the Bernie Madoff scheme have resulted in the largest financial forfeitures in history.

“JP Morgan connected the dots only when it mattered to its own profits but not so diligent when it came to its legal obligations,” Bahara said.