Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
JPMorgan has agreed to pay $330mn to the Malaysian government to settle claims related to its role in the 1MDB financial scandal.
In a joint statement with the Malaysian government on Friday, JPMorgan said it would contribute the amount to Malaysia’s Assets Recovery Trust Account “without admission of liability”.
It added that the agreement “resolves all existing and potential claims and binds both parties from any future claims or litigations related to 1MDB”.
The fraud on 1MDB, Malaysia’s sovereign wealth fund, was one of the biggest in history. Investigators in the US have alleged that at least $4.5bn was stolen from the fund through several schemes masterminded by Malaysian financier Jho Low, who remains at large but maintains his innocence.
The fraud also led to the prosecution of Malaysia’s prime minister at the time, Najib Razak. He was convicted and ultimately sentenced to six years in prison. It also involved several of the biggest banks across the US, Europe and Asia.
The scandal uncovered a global web of corruption and drew in a series of top international financial institutions.
JPMorgan’s Swiss unit was one of multiple banks sued by 1MDB in 2021 as the fund tried to recover losses, alleging fraudulent breach of duties, conspiracy and breach of trust on the part of the banks.
Separately, on Friday Swiss prosecutors fined JPMorgan SFr3mn ($3.7mn) for “failing to take all reasonable and necessary organisational measures” to prevent “aggravated money laundering”, in connection with the 1MDB scandal.
In a separate statement, JPMorgan said: “We appreciate the collaboration with the Malaysian government in resolving past matters related to 1MDB, which have been thoroughly reviewed. Since then, we’ve enhanced our controls, earning the trust of regulators in Switzerland and beyond.”
Additional reporting by Olaf Storbeck in Frankfurt
