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JPMorgan pays $1.7 billion fine

By David McMillin · Bankrate.com
Tuesday, January 7, 2014
Posted: 3 pm ET

It's a new year, but JPMorgan Chase & Co. is dealing with the same old problems.

The banking giant has admitted wrongdoing and agreed to pay a $1.7 billion fine for its involvement with Bernard L. Madoff Investment Securities, the front for the massive Ponzi scheme that defrauded investors of an estimated $65 billion. The settlement will allow Chase to escape any criminal charges for failing to catch signals of fraudulent investing practices.

Supporting documents from the U.S. Department of Justice show that "the Madoff Ponzi scheme was conducted almost exclusively through a demand deposit account and other linked cash and brokerage accounts" at Chase for more than 20 years. While Ponzi schemes have played tricks on plenty of unassuming investors, banks should be another story. The Bank Secrecy Act requires financial institutions to assist government agencies in preventing money laundering. In Chase's case, it's clear that the bank failed to follow the BSA's guidelines.

In addition to the fine, the settlement includes a two-year deferral of prosecution agreement. Over the next two years, the bank must improve its efforts to comply with the BSA. Regulators will review quarterly reports of these efforts and will have access to the bank's nonprivileged books, correspondence, files and other documents. If regulators are satisfied at the end of the term, they will seek dismissal of all related charges.

While it's a massive fine, there will be plenty of critics who continue to be frustrated by the fact that no banking executives will personally pay for the oversight failure.

What do you think? Is a big fine enough, or does the Department of Justice need to seek criminal charges in a case like this?

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18 Comments
ShireFox
January 08, 2014 at 10:54 am

Boycott banks...Join a Credit Union...you vote on and appoint your own officers. Buy a fire and waterproof safe bolted to your floor...keep some moisture absorbent inside so your money doesn't rot. Or you can simply stuff your mattress...biggest threat may be bed bugs instead of the IRS. Just never, ever put all your "eggs" in one basket.

Holt
January 08, 2014 at 10:48 am

I agree. The decision makers should pay - not just monetarily but jail also. They will never learn their lesson. And to thinkthat to pay all this money they wont cant or ignore the fact that they want to foreclose on my little house instead of working with me. Transferring the management of your real estate to another company to "service" is not a way to do business!! Especially since I wrote a 13 page letter to the president of chase sent certified/return receipt and because I am just a homeowner, he was too big to reply and fix the problem. Now I face foreclosure with the servcing co. Come on Chase-get with it! Help those homebuyers who put their faith in you and made you millions - NOT kick them to the curb cause you think your too big to help the little people - as we are treated!

Donald
January 08, 2014 at 10:23 am

It's so obvious that the govt. is corrupt. Why do you think anyone runs for office ? So they can get richer. Why would a politician run for office and spend millions to get the office, if they didn't know they would make it back ten or a hundred fold. They are given free reign with so much of the tax payers money, it's simple to skim off ten or twenty million and more, and bury it in paperwork; as in this case. The executives at the banks involved were in on the Ponzi scheme with Madoff all the way and should be rotting in jail as well a he is; and any government official that was involved as well.
This bit that the rich are untouchable, is unconstitutional as well as about as corrupt as you can get. They seem to think the public are ignorant, and they are stuffing their pockets with our money and sneering at us; daring us to take them on. We can't afford the lawyers to go after them and they know it, and so it will go on. Eventually they will use a fall guy, or throw us tidbit to calm us down, but eventually, the American people will take the government back with a revolution like no other, and there won't be a place to hide from the hate that is brewing. God help us all.

marcellie mitchell
January 08, 2014 at 10:05 am

I think the bank should do some prison time. The fine is a drop in the bucket. When the upper mgmt were forc ed to resign. A golden shoot of obscene amounts of money. Chase bank was caught. Lock them up. They will report laundering money much quicker. Not 20 years

Denise Swift
January 08, 2014 at 9:45 am

When are we all going to put a stop to this corrupt government...Its plain to see that we the taxpayers always have to pay the price...Anyone involved in this criminal act should be put in jail..That includes all bank personnel and government officials...It is sad what we have become in the United States

michael roopas
January 08, 2014 at 9:17 am

The banks can do what ever they want and walk-The government regulators are in bed with them,Just like "Dguy" said,They take their share and exectives walk!!-not so,for you and me!!

clydester
January 08, 2014 at 9:12 am

I'd hate to take it out on a low level customer service person, but its tempting to call and complain about my being a member/customer of an organization that engages in criminal activity...REPEATEDLY!!

Steve
January 08, 2014 at 8:44 am

If I stole $4000 I would have to pay 10 times that to get through court maybe not incluing fines and penalties and then I would be punished with jail or similar. Why doesn't our justice system work the same for the rich????

Dguy
January 08, 2014 at 8:43 am

It's no longer criminal, the government just takes it share like the mobster taking a skim. Which means they are now part of the problem and also criminals.

kienbien
January 07, 2014 at 7:31 pm

First, if they have enough evidence to get a 1.7 billion dollar settlement, they have enough evidence to press criminal charges. So, they should have gone after executives for criminal charges, AND gone after the bank for a fine so painful, that they will not take similar risks in the future.

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