JPMorgan avoided prosecution in the Madoff case by acknowledging that it ignored red flags for about 15 years that Madoff used his account to fund his fraud, Manhattan U.S. Attorney Preet Bharara said. Madoff is serving a 150-year federal prison sentence.
“We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter,” Dimon said in the statement.
Still to be resolved are inquiries into whether the bank’s hiring practices in Asia violated anti-bribery laws, as well as possible manipulation of interest rates and currency benchmarks. The bank is also being probed about mortgage-bond trades after the financial crisis.
“What you want to hear is that they’re resolving these issues, and that by the end of 2014 they get to a place where we’re talking about business operations and not the resolution of litigation or regulatory issues,” Marty Mosby, a bank analyst with Guggenheim Securities LLC., said before earnings were released.
Dimon is motivated to settle the remaining cases, even if doing so means paying a premium over fighting claims in court, he said last month. Battling regulators and private claimants would expose the firm to being “demeaned in the press nonstop,” he said.
“So you may have paid a premium to settle, we thought it was a far better thing to do,” Dimon said at a Dec. 11 conference. “It’s very hard to go to court in some of these matters if you’re a bank.”
JPMorgan eliminated 3,845 jobs during the quarter, bringing the total to 251,196, according to a financial supplement on the company’s website.
JPMorgan, which has said it’s severing ties with foreign banks and individuals to tighten anti-money laundering controls, said last week it’s weighing options including a sale of its prepaid-card business. The bank was the fourth-biggest prepaid- card issuer in 2012, with $9.8 billion of volume, according to the Nilson Report, an industry newsletter.