|BEN PROTESS and JESSICA SILVER-GREENBERG|
Federal authorities are preparing to take action in a criminal investigation of
The Madoff case, coming on the heels of a tentative
Reflecting the magnitude of the investigation, prosecutors and JPMorgan have held preliminary discussions about a so-called deferred prosecution agreement, people briefed on the inquiry said. Such an arrangement would suspend criminal charges against JPMorgan in exchange for a fine, certain other concessions and an acknowledgment that the bank will face charges if it fails to behave. Prosecutors may also require JPMorgan, which has repeatedly said that ''all personnel acted in good faith'' in the Madoff matter, to hire an independent monitor.
While deferred-prosecution agreements are the
But the government, the people added, has not ruled out a harsher punishment for
Underscoring concerns that a guilty plea could destabilize the bank, the people said, prosecutors have discussed the ramifications of criminal charges with one of
Representatives for JPMorgan, the Comptroller and the prosecutors declined to comment. Authorities could announce an action by the end of the year, the people briefed on the inquiry said, a move that could cap a multiyear investigation. Prosecutors, the people said, are weighing criminal charges against JPMorgan employees who did business with
The investigation, led by the F.B.I. and
The case will most likely hinge on a series of e-mails that suggest JPMorgan continued to work with
The people briefed on the inquiry, who spoke on the condition of anonymity because they were not authorized to discuss private negotiations, cautioned that the government had not decided to charge any current or former JPMorgan employees. Likewise, the discussions with the bank itself are preliminary and the government has not concluded what action to take. Two of the people noted that prosecutors were more likely to seek a deferred prosecution agreement than to demand a guilty plea.
Neither JPMorgan nor any other big
But if it does pursue a guilty plea, the government would deal another blow to the reputation of JPMorgan and its chief executive,
The actual repercussions would depend on the underlying criminal charge. The most serious potential violation could complicate
For the government, it would represent an extraordinarily rare show of force. Ever since a criminal indictment led to the demise of the accounting firm Arthur Andersen,
''I don't think anyone is too big to indict — no one is too big to jail,''
The Manhattan United States attorney and the F.B.I are not the only ones pursuing JPMorgan over the Madoff case.
JPMorgan has denied
The developments come at a difficult time for JPMorgan, which faces an onslaught of government scrutiny.
JPMorgan is also grappling with an investigation into the bank's decision to hire the sons and daughters of senior Chinese government officials. And
The Madoff case is particularly thorny. Any action would link the bank to the most notorious financial criminal in more than a generation.
The bank, according to
The bank, starting around 2006, also pursued derivatives deals linked to
About that time, concerns began to circulate within JPMorgan.
''I do have a few concerns and questions,'' one JPMorgan employee wrote in
That month, JPMorgan employees sought approval to push the total to
But according to
Similar concerns were enough to deter
One employee, referring to the agenda for the
This is a more complete version of the story than the one that appeared in print.
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|Source:||New York Times Digital|