JPMorgan Chase Faces $2B Madoff Penalty

Jan 6, 2014 8:03am

Morning Money Memo…

Welcome to 2014, JPMorgan Chase. The giant bank is close to making another big payout to federal regulators. This time the alleged wrongdoing involves what the bank didn’t tell investors after receiving warnings that Bernard Madoff’s money management business was a fraud. The latest settlement would mean the biggest US bank has paid about $20 billion to settle government investigations and lawsuits in the past 12 months.

According to published reports an announcement is likely this week. JPMorgan Chase would pay about $2 billion in penalties related to Madoff and most of the money will go to his victims. The New York Times says the Madoff settlement “would also involve a so-called deferred prosecution agreement, a criminal action that would essentially suspend an indictment as long as JPMorgan acknowledged the facts of the government’s case and changed its behavior.” That kind of agreement is very unusual for a big bank.

This week’s bitter cold weather in much of the country will take a bite out of the economy. Fewer people will spend money at stores, restaurants and other businesses. Several auto companies blamed December’s cold weather for weaker-than-expected sales. Record low temperatures will also raise home heating bills.

The week’s news will be full of tech stories and the Memo will be watching for you as the Consumer Electronics Show kicks off in Vegas. Here’s the big picture: The industry estimates global spending on tech products will decline by 1 percent this year to a still huge $1.06 trillion. Spending on smartphones and tablets is expected to account for some 43 cents of every dollar spent on technology this year. The Consumer Electronics Association says lower average selling prices for smartphones and tablets are why total tech spending may drop.

Apple has snapped up Snapycam, a $1 app that lets smartphone users take full resolution photos at up to 20 frames per second. TechCrunch reports SnappyLabs, the company that makes the app, was purchased for an undisclosed sum.

It was a close vote and the union was split. But Boeing Machinists in the Seattle region did approve a revised offer from the company for a new labor contract. That means an important plane project, the 777-X, will stay in the Washington State, but Boeing workers will no longer have the same pensions.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow

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