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JPMorgan Chase to pay $2.0 billion to avoid Bernard Madoff investigation: reports

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JPMorgan Chase, the US bank used by Bernard Madoff who masterminded the biggest fraud on record, has agreed to pay about $2.0 billion to US authorities to avoid litigation, press reports said Monday.

Madoff masterminded a massive and long-running so-called Ponzi investment fraud which came to light in 2008 as the financial crisis gathered speed.

At the time of its collapse in 2008, Madoff Securities claimed it had about $65 billion in client assets, whereas in fact it had only about $300 million.

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The fraud ruined many investors and stoked public anger over the causes and consequences of the crisis.

Reports in the Wall Street Journal and the New York Times, citing people close to the matter, said JPMorgan Chase would announce the settlement this week.

The Wall Street Journal said: “The bulk of the fines are expected to be routed to victims of Mr. Madoff.”

JPMorgan Chase, the biggest US bank by assets, was the main bank used by Madoff for more than 20 years.

The sources quoted by the two papers said the bank had agreed to pay up to close criminal and civil investigations by federal authorities which suspected that the bank had ignored signs that Madoff was operating a fraudulent scheme.

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The New York Times said that the expected announcement would take to $20 billion the total amount paid by the bank in the last 12 months to settle various government investigations.

The paper noted that the bank had declined to comment on its report but had insisted that all of its staff had acted in good faith.

The various authorities involved also declined to comment.

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The New York Times also reported that in a highly unusual move demonstrating the extreme gravity of the case, the settlement would include a deferred prosecution agreement suspending criminal action provided that the bank acknowledged the facts against it and changed its behaviour.

The expected settlement indicated a new conciliatory stance by the bank, the report said, adding: “Within the bank, there is growing impatience among executives who worry that the scrutiny distracts from its record profits.”

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However, the bank was the target of recent bribery investigations by US authorities over its practise of hiring in China the children of people among the country’s ruling elite, the newspaper noted.

In 2009, Madoff was sentenced to 150 years in prison.

His Ponzi or pyramid scheme was based on using money from incoming investors to pay high returns to longer standing investors. When the financial markets collapsed and investors withdrew their funds, the Madoff illusion was exposed.

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The liquidator of the Madoff business, Irving Picard, had begun action against the bank with a claim of up to $20 billion in damages, but a federal judge and then an appeal court rejected this action, arguing that only investors who had been deceived could launch them.

However, that procedural issue is now before the Supreme Court.


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England pubs reopen on US Independence Day — after first nationwide closure since 1665’s Great Plague

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The streets of Soho filled with merry drinkers in London on Saturday and the pubs of Manchester were packed as England's hospitality sector returned from a three-month coronavirus hiatus.

"It feels amazing," said Leo Richard Bill, a soldier, after getting through the door of one of London's buzziest restaurants on the Thames River's popular south bank.

"It’s been what, like three months since... me and everyone else haven’t been able to get outside and have a good time. So yeah, it feels good to get amongst it," he said.

Parts of London and other cities, deserted during lockdown, sprang to life as people dressed up and came out for "Super Saturday" -- the day England's hospitality sector reopened for the first time since March.

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2020 Election

Trump’s angry words and Coronavirus surge darken Independence Day weekend in America

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The United States marked an unusually somber Independence Day on Saturday, with President Donald Trump bashing domestic opponents and China -- but praising the country's coronavirus response, despite a record surge in cases.

Across the country, virus fears dampened or nixed Main Street parades, backyard barbecues and family reunions on a day when Americans typically celebrate their 1776 declaration of independence from Britain.

Instead of adopting a unifying tone, Trump -- facing a tough re-election and eager to mobilize his political base -- railed against protesters demanding racial justice after unarmed African American George Floyd was killed by a white police officer.

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2020 Election

‘Spoiler’ Kanye West mocked for running for president against his pal Trump: ‘2020 never fails to disappoint’

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President Donald Trump appears to have lost the support of one of his most well-known Black supporters as Kanye West announced on Saturday that he is running for president.

“We must now realize the promise of America by trusting God, unifying our vision and building our future. I am running for president of the United States,” West posted on Twitter, with the hashtag #2020VISION.

The musician was mocked for his presidential bid, here's some of what people were saying:

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