In a news conference on the JPMorgan settlement of the Madoff Case, U.S. Attorney for the Southern District of New York Preet Bharara said the bank as an institution, failed and failed miserably.
It will cost JPMorgan Chase nearly $2.6 billion total to settle allegations that it turned a blind eye to Bernard Madoff's epic Ponzi scheme. No individuals from the bank will be penalized, however, and putting behind one of its biggest scandals will cost the bank less than two weeks' revenue.
Chase was Madoff's primary bank for years, and it structured and sold investment vehicles tied to his purported returns.
In a multipronged settlement unveiled Tuesday, JPMorgan will admit that it violated the Bank Secrecy Act by failing to file a regulatory report in 2008—when it suspected Madoff's returns were fake—and by not using sufficient compliance systems.
In a so-called deferred prosecution agreement, Manhattan U.S. Attorney Preet Bharara won't pursue the charges and will dismiss the case after two years as long as the bank implements a series of reforms and pays a $1.7 billion fine—the largest ever for a Bank Secrecy Act case.