JPMorgan to Pay $330 Million in 1MDB Settlement as Swiss Unit Convicted in Money Laundering Case

Key Takeaways

• $330M Settlement: JPMorgan Chase will pay $330 million to Malaysia’s Assets Recovery Trust Account to settle civil claims tied to the 1MDB scandal, resolving litigation without admitting liability.
• Swiss Conviction: JPMorgan Suisse was criminally convicted by Switzerland’s attorney general for organizational failures that enabled aggravated money laundering, and fined $3.7 million (CHF 3 million).
• Transfers Under Scrutiny: Between October 2014 and July 2015, JPMorgan Suisse executed 43 fund transfers worth $192 million (CHF 174 million) connected to PetroSaudi transactions despite red flags.
• Compensation to 1MDB: The Swiss OAG did not impose additional restitution because 1MDB, as the private claimant, will be compensated $300 million (MYR 1.4 billion).
• Broader Scandal Fallout: The 1MDB case has already cost Goldman Sachs over $5 billion in global penalties, led to prison sentences for former bankers, and ongoing suits against other banks such as Standard Chartered.

Deep Dive

JPMorgan Chase will pay $330 million to Malaysia to settle claims linked to the country’s 1MDB sovereign wealth fund scandal, even as its Swiss private banking arm faces a criminal conviction for failing to prevent aggravated money laundering.

The U.S. banking giant and the Malaysian government confirmed Friday that the $330 million settlement will go into Malaysia’s Assets Recovery Trust Account. The agreement resolves ongoing litigation in Swiss courts, where Malaysia had sued JPMorgan’s private bank in 2021 alleging negligence, breach of contract, and conspiracy to defraud. Malaysia originally sought $800 million in damages.

The payout comes “without admission of liability,” but both JPMorgan and Malaysia have agreed to withdraw pending appeals tied to the case.

“We appreciate the collaboration with the Malaysian government in resolving past matters related to 1MDB, which have been thoroughly reviewed,” JPMorgan said in a statement. The bank added that it has “enhanced our controls, earning the trust of regulators in Switzerland and beyond.”

Swiss Conviction and Fine
On the same day, Switzerland’s Office of the Attorney General (OAG) announced it had convicted J.P. Morgan (Suisse) SA through a summary penalty order for organizational failures that enabled money laundering. The Swiss unit was fined $3.7 million (CHF 3 million).

The OAG found that between October 2014 and July 2015, JPMorgan Suisse executed 43 transactions totaling roughly CHF 174 million. The funds were tied to earlier fraud and mismanagement offenses by PetroSaudi executives, who Swiss courts convicted in August 2024 of embezzling over $1.8 billion from 1MDB.

Despite widespread public reports raising red flags about PetroSaudi and its managers, the OAG concluded that JPMorgan Suisse “did not adequately clarify the nature of the business relationships and lacked reasonable and critical judgment.” The transactions, it said, were possible because of organizational failures at the bank.

The proceedings began in 2022 under Switzerland’s corporate liability framework. While facts predating October 2014 were dropped due to statutory limits, the conviction for later transactions stands. Because 1MDB, the private claimant, has been compensated $300 million (about MYR 1.4 billion), the OAG did not order additional restitution. Both parties accepted the order, which is now final.

Broader Scandal Fallout
The 1MDB saga has become one of the world’s largest corruption scandals, with financier Jho Low and his associates accused of siphoning off more than $4.5 billion from the fund between 2009 and 2014. Former Malaysian Prime Minister Najib Razak began serving a prison sentence in 2022 after being convicted of corruption and money laundering tied to the case, though he maintains his innocence. Low remains a fugitive.

JPMorgan is not the bank most financially battered by 1MDB. Goldman Sachs has paid more than $5 billion across settlements with Malaysia, the U.S. Department of Justice, and regulators in the U.K., Singapore, and Hong Kong. Goldman admitted paying over $1 billion in bribes to secure lucrative bond deals and clawed back $174 million in executive compensation. Former Southeast Asia chair Tim Leissner was sentenced to two years in prison in May, while ex-banker Roger Ng is serving a 10-year sentence.

The scandal’s ripple effects continue. In Singapore, liquidators are pursuing $2.7 billion from Standard Chartered over allegations it facilitated transfers that concealed stolen funds.

For Malaysia, the combined recovery marks a significant step. The finance ministry said last month it has clawed back more than $7 billion connected to 1MDB and its former subsidiary SRC International.

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