JPMorgan Agrees to Pay $330 Million to Malaysia in Resolution of 1MDB Controversy
In a significant development, JPMorgan Chase & Co. has agreed to pay 1.4 billion ringgit ($330 million) to Malaysia to resolve all claims related to the 1Malaysia Development Berhad (1MDB) sovereign wealth fund. The settlement ends the bank's exposure to one of the biggest financial frauds in history, the 1MDB scandal.
The 1MDB investment fund has been at the centre of a scandal for the past decade, with stolen funds estimated to have exceeded $4 billion. JPMorgan's role in the scandal came to light when the Swiss authorities fined the bank's Swiss unit 3 million Swiss francs ($3.7 million) for its role in enabling the laundering of funds misappropriated from 1MDB.
The settlement by JPMorgan Chase & Co. does not admit liability by the bank. The payment will be made to Malaysia's Assets Recovery Trust Account. The agreement resolves all existing and potential claims related to 1MDB and binds both parties from any future claims or litigations.
JPMorgan has stated that since the resolution of matters related to 1MDB, they have enhanced their controls. The bank also appreciates the collaboration with the Malaysian Government in resolving past matters related to 1MDB. However, the settlement is separate from the fine imposed by Switzerland's Attorney General.
Notably, the fine was imposed for failing to take all reasonable and necessary organisational measures to prevent acts of aggravated money laundering. The fine relates to payments including 34 overseas transfers for a total of around 174 million francs that took place between October 2014 and July 2015.
However, the current paragraph does not mention any specific overseas transfers or payments related to the 1MDB scandal. The Malaysian financier Jho Low, who is connected to the 1MDB scandal, remains a fugitive. There is no publicly available information identifying a specific Malaysian financier who is still a refugee and linked to the 1MDB investment scandal.
Investigations related to the 1MDB scandal have led to the imprisonment of ex-Goldman Sachs Group Inc. executives and a former Malaysian prime minister. The settlement by JPMorgan Chase & Co. marks a significant step in the ongoing efforts to recover funds misappropriated from 1MDB.
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