Compliance Bricks and Mortar – JP Morgan ALM Edition

Compliance and JP Morgan Chase

JP Morgan paid $2 billion in fines and disgorgement for failing to file a suspicious activity report against Bernie Madoff. I provided my two cents. Here are some other views.

The invincible JP Morgan by Felix Salmon

This is sheer unmitigated — and, yes, probably criminal — incompetence. It takes a very special kind of banker to not notice that an account has more than a billion dollars in it, for a period of roughly four years, from 2005 through most of 2008. As Matt Levine says, “Madoff Banker 1 is like the one banker on earth who underestimated his client’s business by a factor of 100 or so. ‘Boss, I’ve made the firm thousands of dollars this year,’ he probably said, ‘and I deserve a bonus of at least $200.’”

What the JPMorgan Settlement Means by Peter Henning in Dealbook

In the end, JPMorgan decided that paying more than $2 billion was better than trying to fight claims that it aided the biggest Ponzi scheme in history. The winners in the settlements are Mr. Madoff’s victims, who will never be made whole but are at least a step closer to receiving a measure of compensation, due in part to a creative use of the law by federal prosecutors.

How Much Did J.P. Morgan Lose from Doing Business With Madoff? in’s Law Blog

Linus Wilson, a finance scholar at the University of Louisiana at Lafayette, has tried to crunch the numbers. In a 2011 paper, he calculated how much J.P. Morgan earned from the direct deposit and custodial accounts at the bank containing the vast majority of funds that Madoff victims thought that they had invested with Madoff Securities.

The Madoff settlement is an enormous win for a guilty JPMorgan by Michael Hiltzik in the LA Times

If the government were really determined to root out white-collar crime and prevent outfits like JPMorgan from condoning lawbreaking that unfolds in front of its own eyes, it had the tools to do so: Indict the bank executives and officials who knew Madoff was crooked and did nothing, and threaten to revoke the bank’s charter. Would that be a great loss to the financial system? JPMorgan has been racking up multibillion-dollar settlements over white-collar misdeeds on an almost monthly basis lately. It hasn’t been operating like a bank, but like a criminal enterprise. And as this case now shows, it has been aiding and abetting its fellow criminals along the way.