Skip to content
Opinion
Matt Levine

JPMorgan Pays for Shorting Madoff Without Telling Anyone

In the footnotes someone threatens JPMorgan with "Colombian friends who cause havoc . . . when they get angry," so you have that to look forward to.

When I started working at an investment bank there was a series of compliance videos that one played in a corner of one's computer while doing other work. Nonetheless, the money-laundering one seems to have stuck with me: I still remember the basic plot, in which someone asks a banker questions about how he ignored red flags in a client's account-opening documents, and then at the end the camera moves back and you see that the banker is in prison. Prison for letting someone else launder money! Really makes you think, I guess, primarily about the realism of the compliance videos.

But maybe not, since JPMorgan is going to prison for missing some red flags while working as Bernie Madoff's primary bank. Hahaha no that's impossible, but it is forfeiting $1.7 billion [update: plus a separate $350 million fine and $543 million in private lawsuit settlements], which is really quite a lot of money, to settle money-laundering and so forth charges relating to the fact that it sort of noticed that Madoff was a Ponzi scheme and then didn't do anything about it.