JPMorgan To Pay Over $2bn In Madoff Scheme
JPMorgan Chase has agreed to pay more than $2bn (£1.2bn) to settle claims related to Bernard Madoff's Ponzi scheme.
The bank will pay $1.7bn to settle criminal charges and a $350m civil penalty for what the Treasury Department called "critical and widespread deficiencies" in its programmes to prevent money laundering and other suspicious activity.
JPMorgan was Madoff's primary bank in the later years of a fraud that spanned decades.
The scheme ended in 2008 when Madoff revealed to the FBI that his investment advisory business was a multibillion-dollar Ponzi scheme.
The settlement includes a deferred prosecution agreement that requires the bank to acknowledge failures in its protections against money laundering but also allows it to avoid criminal charges.
No individual executives were accused of wrongdoing.
Madoff, 75, pleaded guilty and is serving a 150-year prison term.
George Venizelos, head of the FBI's New York office, said JPMorgan failed to carry out its legal obligations while Madoff "built his massive house of cards".
"It took until after the arrest of Madoff, one of the worst crooks this office has ever seen, for JP Morgan to alert authorities to what the world already knew," he said.
US Attorney Preet Bharara said: "JPMorgan connected the dots when it mattered to its own profit, but was not so diligent otherwise".
In a statement, JPMorgan said it recognised it "could have done a better job pulling together various pieces of information and concerns about Madoff from different parts of the bank over time".
"We do not believe that any JPMorgan Chase employee knowingly assisted Madoff's Ponzi scheme," the bank said.
"Madoff's scheme was an unprecedented and widespread fraud that deceived thousands, including us, and caused many people to suffer substantial losses."
JPMorgan said it was making "significant efforts" to strengthen its anti-money-laundering practises and believed "the lessons we have learned will make us a stronger company".
Its shares fell 55 cents to $58.45 in morning trading on Tuesday.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.