J.P. Morgan Chase Reported to Be Near Settlement with Federal Prosecutors

Today The New York Times is reporting that banking giant JP Morgan Chase is nearing settlement with the United States Attorney for the Southern District of New York on a deferred prosecution agreement arising out of the bank’s relationship with convicted Wall Street swindler Bernard Madoff. The settlement will result in the government not filing criminal charges against JP Morgan. Instead the agreement will delineate the criminal wrongdoing by the bank but defer prosecution in return for a reported amount in fines and penalties of $2 billion, institution of a compliance program, and the bank’s remaining a good corporate citizen.

The wrongdoing arises from JP Morgan’s failure to file a suspicious transaction report to the Internal Revenue Service in conjunction with Madoff’s account a JP Morgan. This type of criminal activity falls within the purview of money laundering. Thus, the compliance portion of the deferral agreement will involve JP Morgan’s money laundering compliance program.

The government often refrains from bringing criminal charges against large companies to prevent the collateral suffering of innocent persons. This is particularly a concern since the accounting firm of Arthur Anderson collapsed in the wake of the Enron fraud approximately a decade ago. When that firm collapsed, numerous innocent workers lost their jobs and livelihoods. The government has been afraid since that episode of bringing criminal prosecutions that would cause corporate failures, thus harming workers and communities.

For more about the predicted settlement, please see The New York Times Article.

About Richard Serafini

Welcome to my blog. I am an attorney and practice in the area of corporate trial work. Areas of particular emphasis are white collar defense, securities litigation, health care litigation, internal investigations, RICO, and financial litigation. I will be posting interesting developments in my areas of interest. I hope that you find this blog helpful and informative.