Gee: what do you think would happen if you got convicted of Money Laundering?
JPMorgan to Pay $2.6 Billion Over Madoff Scheme Lapses
JPMorgan Chase & Co. (JPM) will pay $2.6 billion to resolve criminal and civil allegations it failed to stop Bernard Madoff’s Ponzi scheme, bringing its legal settlements from the past two years to more than $29 billion and further eroding its once-record earnings.JPMorgan avoided prosecution by acknowledging in an accord with the U.S. that it ignored red flags for about 15 years that Madoff used his account to run a fraud, Manhattan U.S. Attorney Preet Bharara said. The bank will pay $1.7 billion to settle the government’s charges, $350 million in a related case by the Office of the Comptroller of the Currency and $543 million to cover private claims, the firm said in a filing.
The company “failed miserably” in its responsibility as a financial firm, Bharara said yesterday at a press conference. “The bank connected the dots when it came to its own profits but not when it came to its own legal obligations.”
JPMorgan, led by Chief Executive Officer Jamie Dimon, has announced settlements of government and private disputes in the past two years equal to about three-fourths of the $39 billion of profit analysts estimate the bank will have earned in that time after it reports fourth-quarter results next week.
The bank will probably say earnings fell about 20 percent to $17 billion in 2013, ending three straight years of record profits under Dimon’s watch, according to analysts’ estimates compiled by Bloomberg. The cost of yesterday’s settlements reduced net income for the fourth quarter by about $850 million, the bank said.
The agreements, which include a record Justice Department penalty for a violation of the Bank Secrecy Act, highlighted inadequate programs for policing money laundering. The actions take JPMorgan a step closer to resolving a slate of probes that have engulfed the bank since the 2008 financial crisis.