JPMorgan to pay CHF270 million to settle 1MDB claims

The Office of the Attorney General of Switzerland said on Friday that it had fined J.P. Morgan (Switzerland) CHF3 million in connection with the misappropriation of assets from the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB). Keystone-SDA

JPMorgan Chase has agreed to pay 1.4 billion ringgit (CHF270 million) to the Malaysian government to settle all issues related to its role in the scandal involving the Malaysian sovereign wealth fund 1MDB, according to a joint statement on Friday.

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The US Department of Justice has said that more than $4.5 billion (CHF3.6 billion) was misappropriated from 1MDB between 2009 and 2015 by senior fund executives and their associates.

In 2021, 1MDB sued subsidiaries of JPMorgan, Deutsche Bank and Coutts to recover the huge losses suffered by the scandal-hit investment vehicle, claiming “negligence, breach of contract, conspiracy to defraud/prejudice and/or dishonest assistance”.

According to court documents, it sued J.P. Morgan (Switzerland) for $800 million.

+ 1MDB Fraudsters Convicted by Swiss Over $1.8 Billion Scam

The Office of the Attorney General of Switzerland said on Friday that it had fined J.P. Morgan (Switzerland) CHF3 million in connection with the misappropriation of assets from the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB). The outflow of funds totalled around CHF174 million.

The US bank said in a statement that “since then, we have strengthened our controls, earning the confidence of regulators in Switzerland and beyond. We are pleased that these issues have been resolved”.

JPMorgan and Malaysia said in a joint statement that the US banking giant would pay the sum into the southeast Asian country’s asset recovery trust account, “without admitting liability”.

“The settlement agreement resolves all existing and potential claims and commits both parties not to pursue any future lawsuits or litigation related to 1MDB,” said the statement released on Friday by the Malaysian Ministry of Finance.

Each party, they said, will also withdraw all pending actions related to 1MDB’s previous lawsuit against J.P. Morgan (Switzerland) in the Malaysian High Court.

The fund, set up in 2009 as then Prime Minister Najib Razak set about modernising Malaysia, quickly became embroiled in allegations of corruption, leading to a series of investigations, including in Switzerland, Singapore and the US.

The outcry over the fiasco prompted voters to oust Najib Razak and the long-ruling United Malays National Organisation (UMNO) party in the 2018 elections.

The former prime minister is currently seeking to have his prison sentence converted to house arrest.

Translated from French by DeepL/sb

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