We've detected that your browser may be outdated. We recommend you upgrade your browser to a more recent version.

For the best BagTheWeb experience, we recommend using Google Chrome. .

Default_bag_big

Support BagTheWeb via Patreon!

BagTheWeb has been serving the world's curation needs since 2010. With our ever-growing user base, the cost of running the operation is getting higher. Therefore we turn to you, our users, to ask for your help. Please consider supporting us on Patreon.

JPMorgan Chase Franklin International: JPMorgan Is Penalized $2 Billion Over Madoff

viewed 458 times

Updated, 9:37 p.m. | 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.

On Tuesday, Mr. Bharara announced the culmination of that case, imposing a $1.7 billion penalty stemming from two felony violations of the Bank Secrecy Act, a federal law that requires banks to alert authorities to suspicious activity. The prosecutors, calling the amount a record for violating that 1970 federal law, will direct the money to Mr. Madoff’s victims.

The outcome of the case and the tenor of the settlement talks underscore the significant leverage prosecutors wield when negotiating with Wall Street’s biggest firms. Even though JPMorgan had defeated a similar private lawsuit just months earlier, bank executives were unwilling to gamble against the government.

created January 11, 2014

updated January 13, 2014

joined 11/14/2013
1 bag