JPMorgan Chase (JPM) will be paying out more money to settle claims against the bank.
On Tuesday, the Department of Justice announced that JPM would pay $1.7 billion to compensate victims of Bernard Madoff. The bank will avoid criminal charges under Bank Secrecy Act in exchange for admitting that it failed to properly scrutinize Madoff’s transactions, the Associated Press notes.
Madoff’s investment firm collapsed in scandal in 2008. Madoff later pleaded guilty to fraud and received a 150-year prison sentence for bilking investors out of tens of billions of dollars. JPM was Madoff’s lead bank for years before the Ponzi scheme unraveled.
The government alleged that JPM executives were worried about Madoff’s transactions, but did nothing. No bank executives were accused of criminal acts.
Under the deal, JPM must also implement changes to its anti-money laundering procedures.
A court-appointed trustee for Madoff’s victims attempted to sue JPM two years after the scandal broke, but the case was dismissed for lack of standing.
JPM stock sank more than 1% in Tuesday morning trading. JPM stock has risen by more than 25% since February 2013.