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U.S. Attorney Preet Bharara said that an agreement requiring JPMorgan Chase & Co. to pay $2.6 billion to resolve criminal and civil allegations that it failed to stop Bernard Madoff’s Ponzi scheme isn’t “the last big” money-laundering case his office will bring, Bloomberg News reported yesterday. The JPMorgan accord that was announced this month, which includes a record Justice Department penalty for a violation of the Bank Secrecy Act, highlighted inadequate programs for policing money laundering. Bharara said that it was an “aggressive action to take against the nation’s largest bank, but it was appropriately aggressive.” “The Bank Secrecy Act is not merely a suggestion, and it has to be taken seriously,” Bharara said. “It was not taken seriously by JPMorgan in dealing with Madoff, and the bank paid a price for it. And JPMorgan is not going to be the last big case that my office brings in this area, I can promise that.” The top federal prosecutor in Manhattan also cited the money-laundering case filed against SAC Capital Advisors LP last year and the hedge fund’s decision to plead guilty and pay a penalty of $1.2 billion. A U.S. judge hasn’t decided whether she will accept the plea.

Under fire from several regulators, U.S. banks increasingly are rejecting customers involved in activities that are legal but might attract government scrutiny, according to executives, consultants and lawyers, the Wall Street Journal reported today. The banks are sacrificing revenue from a broad array of customers, from marijuana merchants and payday lenders to virtual-currency companies, online gamblers and people who have been convicted of a crime, in order to play it safe. While the temptation to deal with certain businesses might be high, some banking-industry veterans said, it isn't worth provoking regulators or adding more resources to ensure that the clients are meeting industry standards.

Money managers critical of Financial Stability Oversight Council efforts to designate some of their firms as systemically important got bipartisan support from several senators Thursday, PIOnline.com reported on Friday. In a letter to Jacob Lew, FSOC chairman and secretary of the Treasury; Sens. Mark Kirk (R-Ill.), Thomas Carper (D-Del.), Patrick Toomey (R-Pa.) Claire McCaskill (D-Mo.) and Jerry Moran (R-Kan.) expressed concern with a September report by the FSOC's Office of Financial Research, which they said “mischaracterizes the asset management industry” and includes “misused or faulty information.” The FSOC was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act to identify and monitor excessive risks to the U.S. financial system and come up with possible regulatory actions, including designation of systemically important financial institutions warranting enhanced supervision.

Federal prosecutors are trying to thwart the easy access that predatory lenders and dubious online merchants have to Americans’ bank accounts by going after banks that fail to meet their obligations as gatekeepers to the U.S. financial system, the New York Times reported today. The Justice Department is weighing civil and criminal actions against dozens of banks, sending out subpoenas to more than 50 payment processors and the banks that do business with them, according to government officials. In the new initiative, called “Operation Choke Point,” the agency is scrutinizing banks both big and small over whether they, in exchange for handsome fees, enable businesses to illegally siphon billions of dollars from consumers’ checking accounts, according to state and federal officials briefed on the investigation. The crackdown has already come under fire from congressional lawmakers, including Representative Darrell Issa (R-Calif.), who heads the House Oversight Committee, accusing the Justice Department of trying to covertly quash the payday lending industry. In the first action under Operation Choke Point, Justice Department officials brought a lawsuit this month against Four Oaks Bank of Four Oaks, N.C., accusing the bank of being “deliberately ignorant” that it was processing payments on behalf of unscrupulous merchants — including payday lenders and a Ponzi scheme. As a result, prosecutors say, the bank enabled the companies to illegally withdraw more than $2.4 billion from the checking accounts of customers across the country.

Bank of America Corp.’s handling of futures trades has been investigated by the U.S. Department of Justice and the Commodity Futures Trading Commission, according to a regulatory filing in June, Bloomberg News reported on Saturday. The probe was disclosed in a June 14 notice included in the Financial Industry Regulatory Authority BrokerCheck report on Eric Alan Beckwith, a former employee of Bank of America and its Merrill Lynch subsidiary. The U.S. Attorney’s Office for the Western District of North Carolina is examining “whether it was proper for the swaps desk to execute futures trades prior to the desk’s execution of block future trades on behalf of counterparties,” according to the filing, which cites the bank as the source of the information. Authorities also are investigating whether Beckwith “provided accurate information” for a probe into the matter by CME Group Inc.’s Chicago Mercantile Exchange. The CFTC is conducting a parallel investigation, according to the filing.

The team winding down the remnants of Lehman Brothers Holdings Inc. has reached a far-ranging settlement resolving Fannie Mae’s $18.9 billion claim stemming from mortgage loans and mortgage-backed securities the failed investment bank sold to Fannie Mae before the financial crisis, the Wall Street Journal reported today. Lehman said yesterday that Fannie Mae would receive a general unsecured claim of $2.15 billion against its holding company’s estate. Under Lehman’s chapter 11 payment plan, Fannie would recover about 25 cents on the dollar, or about $537.5 million. In return Lehman resolves its long-running dispute with the government-backed housing giant, which had argued Lehman was on the hook for the loans, and frees up $5 billion for creditors. A bankruptcy judge had ordered Lehman to set that amount aside pending the outcome of the Fannie dispute when he approved the bank’s chapter 11 plan. In court papers, a Lehman attorney said the settlement, which requires court approval, will allow the estate to dole out an additional $400 million as part of its fifth distribution to creditors. Lehman’s New York-based holding company has already paid creditors nearly $50 billion since it officially exited bankruptcy protection in March 2012. That figure is expected to grow to more than $80 billion, Lehman said earlier this summer.

Online lender Western Sky Financial LLC has agreed to pay a $1.5 million fine and refund interest payments to borrowers under an agreement reached with New York Attorney General Eric Schneiderman, the Wall Street Journal reported today. Schneiderman had accused the Timber Lake, S.D.-based firm, along with affiliates CashCall Inc. and WS Funding LLC, of charging triple-digit interest rates, a violation of New York's lending laws. The settlement, which comes amid a multistate crackdown on "payday" lenders offering short-term, high-rate loans over the Internet, requires the firms to stop collecting interest on loans to residents and refund to borrowers any interest above the 16 percent state limit, which could result in as much as $35 million in relief for New York consumers, a spokesman for Schneiderman's office said yesterday.

Banks bound by cooperation agreements in an interest-rate rigging probe are providing a windfall of information to U.S. prosecutors investigating possible currency manipulation, Bloomberg News reported today. “We’ve seen tangible, real results,” said Mythili Raman, the acting head of the Justice Department’s criminal division. The cooperation “expanded our investigations into the possible manipulation of foreign exchange and other benchmark rates,” said Raman, who declined to name the banks or comment further on the probe. The accords have compelled some lenders to conduct internal examinations of their foreign-exchange businesses and share findings with the Justice Department, speeding the government’s criminal probe into the $5.3 trillion-a-day market.

The White House is not considering a financial bailout for Puerto Rico, where chronic fiscal challenges have raised the specter of a Detroit-like bankruptcy, an Obama administration official said yesterday, Reuters reported. The island's woes have led credit rating agencies to say that they are considering labeling the U.S. territory's general obligation debt as junk bonds. Puerto Rico already pays the highest interest rates of any big municipal bond issuer, but as a U.S. territory, it does not have the ability to file for chapter 9 protection. "The President's Task Force continues to partner with the Commonwealth to strengthen Puerto Rico's economic outlook and to ensure that it is taking advantage of all existing federal resources available to the Commonwealth," said White House spokeswoman Katherine Vargas. "There is no deep federal assistance being contemplated at this time," she said. Puerto Rico has raised taxes, reformed pension systems and cut staff in moves meant to counter chronic budget deficits and an economy in or near recession for eight years.

Puerto Rico, which is battling a financial crisis of high unemployment and a crushing debt load, is under pressure to show investors and credit-rating agencies that it can still borrow money from the capital markets, the New York Times DealBook blog reported yesterday. Bankers at Morgan Stanley have been reaching out to about a dozen hedge funds, private equity firms and other large investors to gauge their interest in providing up to $2 billion in financing to Puerto Rico. The talks are fluid, but some sources say that the debt could carry yields as high as 10 percent, more than double what a highly rated city or state pays to borrow in the current municipal debt market. As Puerto Rico is a U.S. territory, it does not have the ability to file for chapter 9 protection.