JPMadoff: New Site Hits JPMorgan Hard in re: Madoff
Posted by Larry Doyle on August 12, 2014 11:46 AM |
In early January of this year, JP Morgan was hit with a $2 billion fine and a deferred prosecution agreement for its failures to properly manage and monitor its 20-plus year relationship with the Sultan of Swindle Bernie Madoff.
In my opinion, that settlement had little meaningful correlation with what most in our nation would define as justice. I wrote as much in my commentary, JP Morgan – Madoff: Lots of ‘CYA’ But Little ‘KYC’.
After this settlement was finalized, I can only assume that many of the folks at FINRA, the SEC, DOJ, SIPC (Securities Investor Protection Corporation), and certainly JP Morgan exhaled a welcome sigh of relief to see the JPM-Madoff affair fading into the rear view mirror.
Not so fast!!
Writing a check and agreeing to a deferred prosecution that might be worth a little bit more than the paper on which it is written might qualify as justice on Wall Street and in Washington but certainly not in the court of public opinion.
In the public courtroom, the fight over JP Morgan’s failure to uphold its duties in regard to its relationships with the swindler Bernie Madoff continues with a vengeance. In fact, with the launching of a new site dedicated to this effort, some might think the real fight has just begun.
How so? What site you ask?
With a name that will surely attract extraordinary attention, I welcome highlighting the individuals, the materials, and the mission (including the monthly posting of a chapter by chapter unveiling of a book on the unholy alliance between JPMorgan and Madoff) behind the newly launched website, JPMadoff.
I truly commend the efforts of Helen Davis Chaitman and Lance Gotthoffer in undertaking this effort. Very simply, prior to our regulators and justice officials beginning to work on a case, a bank such as JP Morgan has a responsibility to properly monitor its activities with its clients so that our nation’s laws are upheld and the public’s interests are protected. As Chaitman and Gotthoffer write,
Bernie Madoff committed the biggest financial crime in history. He stole $64.8 billion from tens of thousands of innocent people from countries all over the world. But he did not do this alone. In fact, he could not have done this alone. He needed the assistance of a major bank that could service his needs and he needed to be sure that the bank would conceal his criminal activities.
This was a pretty tall order because, ever since the 1970 enactment of the Bank Secrecy Act, American banks have been required to scrutinize their customers’ activities to assure that they are not acting illegally and the banks have been required, by law, to train their personnel to identify illegal conduct and to report it to the federal government.
JPMorgan Chase is one of the biggest banks in the world and you can be sure that they knew about the requirements of the Bank Secrecy Act. But they also knew how much money they could make off Madoff’s criminal activities and so they gave Madoff all of the services that were essential for him to carry out the biggest theft in history. And the folks at JPMorgan Chase looked the other way, every single day for 20 years, as thousands upon thousands of innocent hard-working people lost their life-savings.
And they looked the other way. Despite their legal obligation to know their customer; despite their legal obligation to report suspicious activity to the federal government, the folks at JPMorgan Chase just looked the other way while they profited from Madoff’s crimes.
I encourage those who would read this commentary to share it and the JPMadoff site with your friends, family, and colleagues so as to keep the public pressure squarely on Wall Street and Washington.
The Madoff scam was not some tightly knit scam as many might want us to believe. The failures to protect the public from a swindler such as Madoff are due not only to captured and corrupted regulators failing to perform but first and foremost to bankers such as those at JP Morgan who willingly look the other way rather than upholding the laws as written in the Bank Secrecy Act.
How many and what other bankers do you think are failing to do the same right now?
We all owe a debt of gratitude to Chaitman and Gotthoffer for bringing increased focus to these issues of national security.
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