J.P. Morgan to Pay Over $2 Billion to U.S. in Penalties in Madoff Case

The Wall Street Journal reports:

U.S. prosecutors and regulators are expected to announce this week that J.P. Morgan Chase JPM & Co. will pay slightly more than $2 billion in penalties for alleged failures to warn about Bernard L. Madoff's massive fraud, said people familiar with the negotiations.

The federal actions, which are expected to include a deferred- prosecution agreement with Manhattan U.S. Attorney Preet Bharara, could be announced as early as Tuesday, these people said.

The bulk of the fines are expected to be routed to victims of Mr. Madoff, who pleaded guilty to charges he ran a decades-long Ponzi scheme that bilked investors out of billions of dollars. Penalties paid to the Justice Department are expected to form the largest chunk of the total— an amount greater than $1.5 billion, these people said.

The rest will be paid to the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network, both of which are part of the Treasury Department.