The Justice Department likes to brag about being tough on the banking industry. But just how tough?
Not as tough as the Treasury Department would like, apparently, at least when it comes to J.P. Morgan Chase & Co. JPM -0.05% and Bernie Madoff.
The government has been looking into whether J.P. Morgan, which had a two-decade relationship with Madoff, ignored warning signs that the operation he was running was actually a giant Ponzi scheme. Banks are supposed to report suspicious activity by clients.
But the Treasury Department, in its investigation, couldn’t seem to catch a break: In May, the Treasury’s inspector-general office subpoenaed J.P. Morgan for Madoff-related documents, but J.P. Morgan declined. Then Treasury asked the Department of Justice to enforce the subpoena, but the Justice Department declined that request in September.