JPMorgan Chase is nearing a $2 billion settlement with federal authorities to resolve suspicions that the bank ignored signs of Bernard Madoff's Ponzi scheme, The New York Times reported, citing people briefed on the case.
The bank's civil and criminal settlements would also involve a deferred prosecution agreement, a criminal action that would suspend an indictment as long as the bank acknowledged the facts of the government's case and changed its behavior, the Times said.
JPMorgan (JPM) will pay more than $1 billion to the prosecutors in Manhattan and the remainder to the Office of the Comptroller of the Currency and a unit of the Treasury Department investigating breakdowns in the bank's safeguards against money laundering, according to details of the deal.
The government plans to use some of the payout for Madoff's victims, the newspaper said.
Madoff was convicted in 2009 of defrauding thousands of investors and is serving a 150-year prison sentence. %VIRTUAL-article-sponsoredlinks%JPMorgan has been accused of ignoring warning signs that Madoff's business was a fraud, often to win more fees and commissions for services they provided.
JPMorgan spokesman Joseph Evangelisti declined to comment on the New York Times report when contacted by Reuters.
Once reaching the Madoff settlements, the bank will have paid some $20 billion to resolve government investigations over the last 12 months, the newspaper said.
A government official told Reuters last month that the U.S. Treasury Department's Office of the Inspector General was examining whether JPMorgan interfered with the OCC's attempts to probe the bank's relationship with Madoff.
Madoff had also separately told U.S. authorities that JPMorgan -- the bank he had used during his decades-long investment scam -- had tried to stop the OCC from getting information about their relationship.
Report: JPMorgan Nears $2 Billion Deal in Madoff Case
Swiss bank UBS blames a rogue trader at its London office for a $2.3 billion loss that is Britain's biggest-ever fraud at a bank. Kweku Adoboli, the 32 year old trader, is sentenced to seven years in prison. Britain's financial regulator fines UBS after finding its internal controls were inadequate and allowed Adoboli, a relatively inexperienced trader, to make vast and risky bets.
The case has echoes of Societe Generale trader Jerome Kerviel, who hid €5 billion in losses. Kerviel said SocGen turned a blind eye to his colossal positions in late 2007 and early 2008 as long as they made money for the bank.
Wells Fargo Bank agrees to pay at least $175 million to settle U.S. Department of Justice accusations that it discriminated against qualified African-American and Hispanic borrowers from 2004 through 2009. The department said the bank's discriminatory lending practices resulted in more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia paying higher rates for loans solely because of the color of their skin.
JPMorgan Chase announces a loss of $2 billion from a trade that was meant to protect the bank if the global economy sharply deteriorated. Later, losses from the bad trade swell to nearly $6 billion and shave much more from the company's stock market value. The episode heightens concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis.
Barclays agrees to pay more than $450 million to U.S. and British regulators to settle charges that it attempted to manipulate a global benchmark interest rate known as LIBOR. The rate indirectly affect the costs of hundreds of trillions of dollars in loans that people pay when they get loans to go to college, purchase a car or buy a house. Numerous other banks are under investigation for similar violations.
UBS pays $1.5 billion to settle LIBOR manipulation charges with regulators in the U.S., Britain and Switzerland. The bank says some of its employees tried to rig LIBOR in several currencies.
An independent review finds Kabul Bank spirited some $861 million out of war-torn Afghanistan in a massive fraud based on fake loans to 19 individuals and companies. A bailout of the bank costs the equivalent of 5 percent of Afghanistan's gross domestic product, making it one of world's largest banking failures ever.
HSBC, Europe's largest bank, says it's paying $1.9 billion in penalties to settle a U.S. money laundering probe. The investigation into HSBC focused on the transfer of billions of dollars on behalf of nations such as Iran and the transfer of money from Mexican drug cartels. The bank said its anti-laundering measures were inadequate and said it was "profoundly sorry."