Stemming from its ties to Ponzi schemer Bernie Madoff, gigantic bank JPMorgan Chase is close to a settlement with federal authorities concerning the matter. According to The New York Times, the deals would involve financial penalties of around $2 billion and a criminal action.
JPMorgan is supposedly going to agree to a deferred-prosecution agreement, which would "list the bank’s criminal violations in a court filing but stop short of an indictment as long as JPMorgan pays the penalties and acknowledges the facts of the government’s case." The deferred-prosecution agreement, rather than a guilty plea, is preferred in the wake of the Enron fiasco, when the company's accounting firm was convicted in 2002 and took 28,000 jobs down with it. Avoiding a guilty plea means avoiding potential unemployment for large numbers of bank employees.
It's a bit short of an actual guilty plea, but the agreement is apparently only utilized when "misconduct is severe." Finally, five years later, we know definitively that Bernie Madoff's financial crimes and JPMorgan's willful ignorance of them were severe.
A few weeks ago, JPMorgan agreed to a massive $13 billion settlement for its role in the financial crisis. Separately, five Madoff employees are currently on trial for their alleged financial misdeeds.
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to email@example.com.