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Justice? JPMorgan to Pay $2 Billion to Make Madoff Case Go Away
Posted on Jan 6, 2014
Federal prosecutors reportedly are nearing a deal with JPMorgan in which the bank would pay about $2 billion in fines and face a suspended indictment over accusations that some of its bankers knew that Bernie Madoff was running a Ponzi scheme, yet JPMorgan continued to serve as one of his main banks.
That means despite playing a key supporting role in what is likely the largest financial scam in U.S. history—more than 2,500 investors lost $17.3 billion in investments, and $48 billion more in what they thought were profits—none of the bankers handling Madoff for JPMorgan will pay a price. Instead, the bank once again buys its way out. From The New York Times, which broke the story:
The silver lining is that some of the penalties will go to funds handling payouts to Madoff’s victims. But once again, a big bank, rather than facing the kind of everyday justice the government exacts from the poor and the powerless, will be able to wriggle its way out of responsibility for what the government believes was criminal behavior.
We wrote recently about U.S. District Judge Jed S. Rakoff’s scathing rebuke of the federal prosecutors’ view toward Wall Street crime, and about a different but seemingly related instance of banking lobbyists supplying the wording for federal banking legislation. With that kind of hand holding between the government of the people and Wall Streeters with their rapacious greed and amoral actions, it’s easy to understand to simmering cynicism where the federal government’s priorities lie. And it’s not with Main Street.
The Times piece makes it clear why JPMorgan would want to pay a fine to settle the case:
Buying credibility indeed. The question is, does the American public buy it?
—Posted by Scott Martelle.
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