JP Morgan pays £2.6bn to head off criminal prosecution over Madoff.

FT: “JP Morgan Chase bankers had concerns about Bernard Madoff for more than a decade but failed to inform US authorities, according to a damning assessment of the bank’s serial inaction by the US attorney for Manhattan.”
“The bank agreed on Tuesday to pay $2.6bn to head off a criminal prosecution and private litigation over its failures to act on its suspicions, some of which came more than a decade before Madoff’s Ponzi scheme was revealed.
It agreed to pay $1.7bn to the Department of Justice, $350m to the Office of the Comptroller of the Currency, $325m to Irving Picard, the trustee for the Madoff bankruptcy, and $218m to plaintiffs in class-action lawsuits.
The $1.7bn payment is “the largest-ever bank forfeiture”, according to the office of Preet Bharara, US attorney for the southern district of New York.
….As part of the deferred prosecution agreement, which spares the bank from criminal prosecution in exchange for the payment and a promise to reform its practices, JPMorgan admitted that it had ignored multiple red flags.
This latest multibillion-dollar blow to JPMorgan had been widely expected but the amount of suspicion from different areas of the sprawling bank over two decades has never been made public before.
….Twice, in 1998 and 2007, JPMorgan’s asset management arm declined to invest in Madoff funds with one manager commenting that the returns were “possibly too good to be true” and citing Madoff’s refusal to meet them to discuss his strategy. The suspicions were never relayed to the bank’s anti-money laundering team.”