NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING
DONATE TODAY
 $110,174


  January 7, 2014

JP Morgan Will Not Be Criminally Prosecuted for Its Role in Madoff's Ponzi Scheme


JP Morgan served as the principal bank for Bernie Madoff, causing losses of $20 billion, yet they will pay only $2.6 billion in settlement charges
Members don't see ads. If you are a member, and you're seeing this appeal, click here
   



audio

Share to Facebook Share to Twitter



The Real News is a vital answer to The New York Times, the house organ of the oligarchs. - Al Salzman
Log in and tell us why you support TRNN


biography

William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.


transcript

JP Morgan Will Not Be Criminally Prosecuted for Its Role in Madoff's Ponzi 
SchemeKAYLA RIVARA, TRNN PRODUCER: Welcome to The Real News Network. I'm Kayla Rivara in Baltimore. And welcome to this latest edition of The Black Finance and Fraud Report.

Now joining us is Bill Black. Bill is an associate professor of economics and law at the University of Missouri-Kansas City. He's a white-collar criminologist and a former financial regulator. He's also author of the book The Best Way to Rob a Bank Is to Own One. And he's a regular contributor to The Real News.

Bill Black, thank you so much for joining us.

BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you.

RIVARA: So right now it looks like JPMorgan is set to pay a possible $2.6 billion in settlements, this time pertaining to the Bernie Madoff situation. Can you give us the latest on this and what it really means for enforcing accountability on Wall Street firms?

BLACK: Yeah. It's a brand-new year, but it's the same old JPMorgan and the same old Justice Department. And so we have JPMorgan in what is about the 12th massive fraud scheme, measured by causing losses of well over $100 million. In this case, it helped--contributed to losses of well above $20 billion, though it's going to be allowed to settle for about $2.5 billion. About $1.7 billion goes to the Justice Department, about $250 million goes to the financial regulator, the Office of the Comptroller of the Currency, and about $500 million goes to the individual civil plaintiffs who say they were defrauded by Bernie Madoff. Now, the Justice Department money will flow through to the victims of the Madoff fraud.

What's this all about? It's that JPMorgan Chase knew--first, it served as the principal banker of Madoff. And second, it knew that Madoff had violated a whole series of things that should have led JPMorgan to alert the Justice Department through a criminal referral of likely criminal action. In fact, a JPMorgan executive said that what was going on was almost certainly a Ponzi scheme.

On top of that, JPMorgan alerted the British banking authorities, but not only didn't alert the U.S. banking authorities; it stonewalled them and worked very hard to keep them from learning about the Madoff frauds.

And when the Office of the Comptroller of the Currency, the federal regulator for JPMorgan, finally learned about this stuff and went to JPMorgan to get the information they had so that they could try to put together whether Madoff was engaged in a Ponzi scheme, JPMorgan refused to give the information and the Justice Department refused to enforce the subpoena.

So, accountability? Not so much. No criminal action, no individual defendants are going to pay anything at JPMorgan. Nobody's going to lose their job at JPMorgan. Nobody's going to lose their bonus at JPMorgan. And the Justice Department is crowing about another massive victory, because they got fairly big bucks, but, of course, compared to the losses caused, fairly small bucks as well.

So, new year, same old same old.

RIVARA: So from here there's nothing to be expected? Are there going to be any more proceedings, legal proceedings with this? Or is it a closed case?

BLACK: It's a deferred prosecution agreement, which is a lot of big words for we ain't going to prosecute you. And officially, two years from now it will all go away and it'll be as if the Justice Department was never involved.

RIVARA: Well, Bill Black, thank you so much for joining us.

BLACK: Thank you.

RIVARA: And thank you for joining us on The Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.



Comments

Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

latest stories

Paul Jay On Our Need For Monthly Donors
Trump's Labor Pick is Millionaire CEO Who Blames Workers for Their Poverty
Why Thousands Are Staying in Standing Rock Despite Army Corps's Decision to Halt the #DAPL
Trump Nominee for Homeland Security John Kelly Favors Draconian Immigration Policy
New Baltimore Mayor Plans Regional Approach to Problems Like Poverty and Drug Addiction
Vijay Prashad: The Battle for Aleppo is Over
Should the Electoral College Be Abolished?
Trump Picks Leading Climate Denier to Head EPA During Time of Climate Crisis
Following Oakland Fire, Baltimore Evicts Residents of DIY Arts Space
The Real News of the Day - Wednesday, December 7
The People's Tribunal on the Iraq War, Day One: Philip Giraldi
Trump Taiwan Phone Call Not an Impulsive Act
There's No Issue More Burning Than Creating Our Global Climate Change Bureau
U.S. Planned to Go to War with Japan and Germany Before Pearl Harbor Attack
Anti-Government Carson to Lead Dept. of Housing and Urban Development
UN Admits Fault in Haiti's Cholera Outbreak as Country Faces Prospect of Famine
The Real News of the Day - Tuesday, December 6
The People's Tribunal on the Iraq War, Day One: John Kiriakou
The People's Tribunal on the Iraq War, Day One: John Cavanaugh
Austrian Presidential Election Shows How United Front Politics Can Defeat the Far Right
Standing Rock Cautiously Optimistic Following Denial of Easement For Dakota Access Pipeline
Italian Referendum Defeat is No Victory for the Right Wing
The Global Networks of the Resurging Far Right
Agent Provocateurs and the Assassination of Black Panther Fred Hampton
The People's Tribunal on the Iraq War, Day One: Medea Benjamin
The People's Tribunal on the Iraq War, Day One: Vijay Prashad
The People's Tribunal on the Iraq War, Day One: Terry K. Rockefeller
After Historic Protests, Obama Blocks Current Route of the Dakota Access Pipeline
The Real News of the Day - Monday, December 5
Fatah-Hamas Reconciliation in the Works?

TheRealNewsNetwork.com, RealNewsNetwork.com, The Real News Network, Real News Network, The Real News, Real News, Real News For Real People, IWT are trademarks and service marks of Independent World Television inc. "The Real News" is the flagship show of IWT and The Real News Network.

All original content on this site is copyright of The Real News Network. Click here for more

Problems with this site? Please let us know

Linux VPS Hosting by Stack Star Hosting