Defferred Prosecution Agreement between JPMorgan and US Government in Madoff Ponzi Scheme Scandal

Deferred Prosecution Agreement between JPMorgan and the US Government in Madoff Ponzi Scheme Scandal

On January 6, 2014, JPMorgan Chase entered into the Deferred Prosecution Agreement with the Officeof the US Attorney for the Sourthern District of New York, in which JPMorgan agreed to pay 1.7 billion dollars penalties (the “Stipulated Forfeiture Amount”). In the investigation of the scandal, JPMorgan admits its wrongdoing related to the Madoff Scandal in conjunction with Ponzi scheme. The Stipulated Forfeiture Amount is to be distributed to victims of the fraud at Madoff Securities. This paper studies what is Ponzi scheme, and why JPMorgan is responsible for its conduct in the fraud by Madoff Securities. Moreover, this paper explores the JPMorgan’s compliance program in the Agreement, which describes the JPMorgan’s obligation to cooperate the process of the US regulatory authority. This paper shows the US legal standards of the banking business, which suggest implications of a legal standard and an ethical obligation of banking institutions to customers in Korea.