Fearing Costly Lawsuits and Fines, Some Banks Allocate More to Root Out Ponzi Schemes

By Brian Monroe

Several domestic and international banks are retraining investigators tasked with identifying fraud and money laundering to better uncover Ponzi schemes, say compliance officers and consultants. The move follows headline-grabbing scandals and costly litigation aimed at the banks used by Ponzi schemers. In March, The New York Times reported that federal prosecutors are examining whether JPMorgan Chase failed to disclose its suspicions about Bernard Madoff. The bank is also the subject of several lawsuits filed on behalf of Madoff's investors. As a consequence of similar troubles at other institutions, financial regulators have become concerned enough about Ponzi schemes that some have...