JPMorgan Chase has agreed to pay the US federal prosecutors US$ 1.7 billion for allegedly turning a blind eye to the Ponzi scheme run by Bernard Madoff while acting as his banker.
The banking giant conceded that it failed to maintain an effective anti-money laundering program and also failed to file a suspicious activity report in relation to its handling of accounts of Madoff.
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"We recognize we could have done a better job," said JP Morgan spokesperson Jennifer Zuccarelli.
The bank will pay more than US$2.5 billion when a US$350 million Treasury Department penalty and nearly US$550 million to settle lawsuits by investors is added.
A full 100% of the forfeited money will go to Madoff’s legion of victims, said Manhattan US Attorney Preet Bharara.
In 2009, Madoff was found guilty of stealing about US$13 billion from hundreds of investors.
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By GlobalDataThe settlement is only the latest of JPMorgan’s legal difficulties. In November, the bank agreed to a US$13 billion settlement with the US government over the bank’s mortgage bonds.
Additionally, JPMorgan also faces at least eight other government probes.
