Compelo Banking is using cookies

We use them to give you the best experience. If you continue using our website, we'll assume that you are happy to receive all cookies on this website.

ContinueLearn More

JPMorgan Chase agrees to pay $2.3bn in fines over Ponzi fraud

US regulators have slapped a fine of nearly $2.3bn on JPMorgan Chase for failing to monitor and thwart massive Ponzi fraud run by Bernard Madoff.


As per the terms of the agreement, the bank will pay approximately $1.7bn penalty to the victims of the Madoff fraud through a parallel civil forfeiture complaint. The bank has also agreed to refrain from future criminal conduct and cooperate fully with the Government.

Another $543m will paid separately to a court-appointed bankruptcy trustee that charged the US lender JPMorgan on behalf of Madoff victims as well as other plaintiffs in a separate case, as reported by the Wall Street Journal.

The agreement, which will enable the bank to avoid litigation by the US authorities, also requires JPMorgan to continue the implementation reforms of its Bank Secrecy Act (BSA)/Anti-Money Laundering compliance program.

Manhattan US Attorney Preet Bharara said, "Institutions, not just individuals, have an obligation to follow the law and to police themselves. They must exercise due care not only with their own money but with other people’s money also."

In separate actions, the US Department of the Treasury, Office of the Comptroller of the Currency (OCC), and the Financial Crimes Enforcement Network (FinCEN), announced that they reached agreements with JPMorgan.

As per the documents filed today in Manhattan federal court, JPMorgan served as the primary bank through which Madoff operated his Ponzi scheme since 1986, and collected huge funds from the investors.

During the height of financial crisis n 2008, Madoff Securities claimed it had about $65bn in client assets, whereas in fact it had only approximately $300m. Due to the fraud, investors suffered huge losses and were seeking return of their investment.

Image: JPMorgan Chase & Co. headquarters in Manhattan, New York City, New York, US. Photo courtesy of official-ly cool.