December 12, 2013 / 5:20 AM / 4 years ago

Criminal action expected for JPMorgan in Madoff case: NYT

(Reuters) - JPMorgan Chase & Co (JPM.N) and federal authorities are nearing settlements over the bank’s relationship with convicted Ponzi schemer Bernard Madoff, striking tentative deals that would involve about $2 billion in penalties and a rare criminal action, the New York Times reported.

The settlements would fault the bank for turning a blind eye to Madoff's huge Ponzi scheme, the Times said, citing people briefed on the case. (r.reuters.com/kef45v)

JPMorgan spokesman Joseph Evangelisti declined to comment on the New York Times report when contacted by Reuters.

Madoff was convicted in 2009 of defrauding thousands of investors and is serving a 150-year prison sentence. JPMorgan has been accused of ignoring warning signs that Madoff’s business was a fraud, often to win more fees and commissions for services they provided.

The New York Times said the settlement with federal prosecutors in Manhattan would include a so-called deferred-prosecution agreement and more than $1 billion in penalties to resolve the criminal case.

    The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank’s money-laundering safeguards, the paper said.

    JPMorgan, the biggest U.S. bank by assets, recently reached a $13 billion settlement of a range of government claims over bad mortgage securities and struck another deal with regulators to pay about $1 billion for its “London Whale” derivatives trading debacle.

    Reporting by Chris Peters in Bangalore; Editing by Supriya Kurane

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