It may be a new year but for J.P. Morgan (JPM), 2014 is starting to look a lot like 2013. That's because the mega bank reportedly will be paying the federal government another multi-billion dollar fine.
According to Monday's New York Times, which cites "people briefed on the case," J. P. Morgan is near a deal to pay about $2 billion in criminal and civil penalties for ignoring signs of Bernie Madoff's Ponzi scheme. Including the latest penalty, J.P. Morgan will have paid the federal government $20 billion in fines over the past 12 months.
Related: Sallie Krawcheck on J.P. Morgan’s Billions in Fines: “A Real Cost of Doing Business”
J.P. Morgan will pay more than $1 billion to federal prosecutors in Manhattan and the rest to the Office of the Comptroller of the Currency and a unit of the Treasury Department, according to The Times. A portion of the payments will be go to some of Madoff's victims. J.P. Morgan will also reportedly acknowledge the facts of the government case and agree to change its practices. Yahoo Finance contacted the bank, which declined to comment on The New York Times report.
Jeff Macke of Yahoo Finance calls the latest settlement "extortion" by the government to help fund its own coffers.
As part of the expected settlement, J. P. Morgan will also acknowledge the facts of the government case and agree to change its practices, while the government will not indict the bank, according to The New York Times report. Yahoo Finance contacted the bank, which declined to comment on the New York Times report.
Related: Jamie Dimon: Still ‘Last Man Standing’ But Knocked Down a Few Pegs
"This will never ever go away for J.P. Morgan," says Macke in the attached video. "How long do you think Jamie Dimon will apologize before he finally says $20 billion worth of shareholder money seems excessive to me?"
Tell us what you think. Has J.P. Morgan become a whipping boy for the government or does it deserve to be punished if it violated the law?
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