Regulators plan to fault JPMorgan Chase & Co that served as the main bank of Bernie Madoff for two decades. This decision was made as the regulator found JPMorgan Chase & Co guilty of failing to conduct adequate due diligence and report suspicious activity.
A cease-and-desist order against JPMorgan is likely to be issued by the Office of the Comptroller of the Currency. This will require the largest bank in the United States to put an end to the alleged failures in its anti-money laundering practices. According to sources, this order is expected to come later this year though a fine is not expected. The Office of the Comptroller of the Currency can take harsher action against the bank, including financial penalties if it is not satisfied with JPMorgan’s response.
Madoff was arrested in December 2008 and pleaded guilty in 2009 to running a massive, decades-long Ponzi scheme. He is presently is serving a 150-year prison sentence.
Irving Picard, a trustee for Madoff’s victims, has accused JPMorgan of ignoring warning signs that the business of Madoff was a fraud and has attempted to sue the bank. Picard is in the process of appealing a ruling whereby a judge has tossed out all but $425 million of Picard’s $19.9 billion lawsuit against JPMorgan.
There was no evidence showing that anyone at the bank knew of the elaborate scheme of Madoff, JPMorgan has said. The bank did file a suspicious activity report in London two months before Madoff was arrested and described his investment performance as “too good to be true,” according to Picard’s lawsuit.