JPMorgan Chase is starting the year the same way it ended the last one: by whipping out its wallet, Jessica Silver-Greenberg and Ben Protess report in DealBook. The bank is preparing to reach roughly $2 billion in criminal and civil settlements with federal authorities who claim that it ignored signs of Bernard L. Madoff’s huge Ponzi scheme, bringing its settlement total to nearly $20 billion over the last year. The settlements come on the heels of a record $13 billion deal with the Justice Department in November related to the bank’s questionable mortgage practices leading up to the financial crisis.
The Madoff settlement involves a so-called deferred prosecution agreement, a criminal action “that would essentially suspend an indictment as long as JPMorgan acknowledged the facts of the government’s case and changed its behavior.†It is nearly unheard-of for an American bank. The deal calls for the bank to pay more than $1 billion to the prosecutors in Manhattan and the rest to the Office of the Comptroller of the Currency. Some of the payout will be earmarked for Mr. Madoff’s victims, according to unidentified people briefed on the case.
While no individual executives have been accused of wrongdoing, federal prosecutors are expected to cite JPMorgan for a criminal violation of the Bank Secrecy Act, though prosecutors will only call for a fine and the deferred prosecution agreement, rather than demand the bank plead guilty to the criminal violation as had been considered at one point.
Ms. Silver-Greenberg and Mr. Protess write: “Despite serving as painful reminders of JPMorgan’s ties to Mr. Madoff â€" it was his primary bank for more than two decades â€" the settlements would enable the bank to put another investigation behind it.
“The payouts reflect a new conciliatory stance at JPMorgan. Within the bank, there is growing impatience among executives who worry that the scrutiny distracts from its record profits. And while it continues to haggle over the details of each settlement, people close to the bank say, JPMorgan is keen to regain its credibility and is resigned to pulling out the checkbook to make that happen.â€
MEN’S WEARHOUSE STARTS HOSTILE BID FOR JOS. A. BANK  | Men’s Wearhouse announced a cash bid on Monday, reports Michael J. de la Merced in DealBook, taking a newly increased $1.6 billion offer directly to shareholders of Jos. A. Bank and pushing for two new directors. Men’s Wearhouse raised its offer 4.5 percent, to $57.50 a share, and would start a tender offer for Jos. A. Bank stock through March 28.
Mr. de la Merced writes: “Monday’s moves did not come as a surprise: On Friday, Jos. A. Bank amended its takeover defenses, effectively limiting shareholders to owning no more than 10 percent of its stock.â€
COULD BILLION DOLLAR VALUATIONS FOR START-UPS SIGNAL A BUBBLE? Â |Â Investors are pouring money into start-ups at a rate that is eclipsing the exuberance of the dot-com bubble of more than a decade ago, David Gelles and Claire Cain Miller write in DealBook. Such was the case with Fab, an online retailer selling affordable high design, which was valued at $1 billion last summer, vaulting it into the club of billion-dollar technology start-ups that include Snapchat, Pinterest, Evernote, Spotify and Dropbox. But Fab, like many start-ups, saw its valuation fall after internal struggles.
“The rise and stumbles of Fab demonstrate how swiftly the fortunes of start-ups can change. At the company’s giddy high point, it also illustrated why some billion-dollar-plus valuations have raised concerns of a new dot-com bubble.
“Yet it is more than a speculative frenzy that is driving up the valuations of these companies. A number of changes in the capital markets, the venture capital industry and the public equity markets have conspired to make it easier than ever for unproven start-ups to be valued at $1 billion or more.â€
The success of some high valuations in the stock and merger market, including Facebook, Twitter and Instagram, have justified these valuations to venture capitalists. Some, however, find these high valuations unreasonable and caution that they “are a sign that too much money is chasing too few good ideas.â€
ON THE AGENDA  | The ISM nonmanufacturing index for December and data on factory orders in November are out at 10 a.m. The New York Times business reporters David Kocieniewski and Gretchen Morgenson are answering questions this week on challenges posed by Wall Street’s influence over markets and prices. Congress gets back to work. Jon Steinberg, the president and chief operating officer of BuzzFeed, is on CNBC at 11 a.m. The 2014 Consumer Electronics Show kicks off this week in Las Vegas.
WALL STREET REGULATOR ANNOUNCES DEPARTURE  | George S. Canellos announced on Friday that he was stepping down as co-chief of the Securities and Exchange Commission’s enforcement division, a sign that the agency’s enforcement agenda could be changing, Ben Protess reports in DealBook. Under his watch, the agency took on a host of insider trading cases against some of Wall Street’s most powerful hedge funds, including SAC Capital Advisors and the Galleon Group. But some critics question whether Mr. Canellos and the S.E.C. could have done more to hold Wall Street accountable after the financial crisis. Mr. Canellos closed an investigation into former executives of Lehman Brothers, which set off a heated debate at the S.E.C.
Mr. Canellos and his co-chief, Andrew J. Ceresney, served under Mary Jo White, the chairwoman of the S.E.C., who is not expected to appoint another co-chief, leaving Mr. Ceresney to put his mark on the enforcement division of the agency.
Liberty Seeks Full Ownership of Sirius XM  | Liberty Media proposed on Friday to acquire the 48 percent of Sirius XM it does not already own in an all-stock deal valued at more than $10 billion. DealBook »
Jos. A. Bank Amends Its Poison Pill  | The company reduced the ownership threshold of its shareholder rights plan to 10 percent from 20 percent, matching a similar plan at Men’s Wearhouse. DealBook »
Apple Purchases the Photo App SnappyLabs  | ReCode writes that Apple has confirmed that it has acquired SnappyLabs after an initial report by TechCrunch. SnappyLabs makes SnappyCam, which allows the iPhone’s camera to take rapid-fire photographs. RECODE
Telefonica Denies Joint Bid for TIM Brasil  | “Spain’s Telefonica denied on Monday that it was involved in looking at making a joint offer for Telecom Italia’s Brazilian wireless network operator TIM Brasil,†Reuters reports. REUTERS
Activist Investors Spur M.&.A. Deals  | “In a bleak period for mergers and acquisitions, activist investors have been a rare bright spot,†The Wall Street Journal reports. WALL STREET JOURNAL
China Issues Rules to Curb Shadow Banking  | China has drafted regulations to contain risks in its growing shadow banking sector, Reuters reports. REUTERS
More of the Same in 2014 for Stocks and Bonds  | Two analysts, who accurately predicted the stock surge in 2013, said they would not be surprised if 2014 brought more of the same, James B. Stewart writes in the Common Sense column in The New York Times. NEW YORK TIMES
Goldman Sachs Partner in China Retires  | Yang Changpo, a Goldman Sachs partner based in Beijing, is retiring after seven years, Bloomberg News reports. BLOOMBERG NEWS
Cantor Fitzgerald’s Lutnick Said to Be Considering Mayoral Run  | Howard W. Lutnick, the chief executive of Cantor Fitzgerald, could be considering running for mayor on New York in four years, The New York Post’s Page Six reports, citing an unidentified person familiar with the situation. A spokesman told The Post: “It’s too soon. Howard, if he runs, will likely not run for eight years.†NEW YORK POST
U.S. Bank Stocks Attractive Again  | Bank stocks rose 33 percent in 2013, buoyed by investors heartened by the improving economy, and analysts are predicting a similar trend in 2014, The Wall Street Journal reports. WALL STREET JOURNAL
Carlyle Group Plans Mutual Funds  | Attempting to attract retail investors, the private equity firm Carlyle Group has revealed plans to list two mutual funds, Reuters reports. REUTERS
Investor Group Buys LGS Innovation  | An investor group led by the private equity firm Madison Dearborn Partners purchased LGS Innovation, a public sector subsidiary of Alcatel-Lucent, for $200 million, The Washington Post writes. WASHINGTON POST
Chief Executive of Strauss Coffee Ousted  | Shareholders decided to terminate Todd Morgan as chief executive of Strauss Coffee, Reuters writes. Strauss Coffee’s parent company, the Strauss Group, is one of Israel’s largest food and beverage companies. REUTERS
Connecticut Firm Acquires Joseph’s Pasta Company  | Brynwood Partners purchased Joseph’s Pasta Company, which makes frozen pasta and sauces, from the Nestlé Prepared Foods Company for an undisclosed amount, The Boston Globe reports. BOSTON GLOBE
Hedge Funds Slow to Adopt Ads  | The Financial Times writes: “Hedge funds are reluctant to embrace the smart and sassy approach to advertising of television’s Don Draper, despite a change in United States rules that allow them to market to new investors for the first time.†FINANCIAL TIMES
Hertz Rises on Icahn Purchase  | Hertz increased 1.9 percent after the activist investor Carl C. Icahn purchased 40 million shares, Bloomberg News reports. BLOOMBERG NEWS
N.Y.S.E. Beats Nasdaq in Internet and Technology I.P.O.’s  | The New York Stock Exchange secured more initial public offerings of technology and Internet companies in 2013 than the Nasdaq Stock Market for the first time in at least 19 years, The Wall Street Journal reports. WALL STREET JOURNAL
China’s Shanxi Coal Gets Go-Ahead on I.P.O.  | China’s securities regulator has given approval to the Shanxi Coal Industry Company to start its I.P.O. roadshow, The Wall Street Journal writes. The regulator’s final approval culminates a wait of more than three years for the I.P.O. WALL STREET JOURNAL
I.P.O.’s May Limit Private Equity Buyouts  | The strength of the I.P.O. market could reduce buyout opportunities for private equity firms, advisers say, Financial News reports. FINANCIAL NEWS
Ecuadorean Navy Comes Through for Amazon Chief  | Jeff Bezos, the founder of Amazon, was airlifted by the Ecuadorean Navy after he suffered a kidney stone while visiting the Galápagos Islands on New Year’s Day, the Bits blog reports. When asked for comment, an Amazon spokesman quoted Mr. Bezos as saying: “Galápagos: five stars. Kidney stones: zero stars.†NEW YORK TIMES BITS
Business Insider Is Said to Have Rejected $100 Million Deal  | The website Business Insider is said to have turned down a buyout offer worth over $100 million, Fox Business News reports, citing an unidentified person familiar with the situation. FOX BUSINESS NEWS
European Banks Face Eased Reforms  | The European Commission will not require big European banks to separate lending operations from trading activities, The Financial Times reports, citing a European Commission draft proposal. The proposal follows the 2012 Liikanen report, which provided a proposal for restructuring banks. FINANCIAL TIMES
Merkel Injured on Ski Trip  | Chancellor Angela Merkel of Germany injured her pelvis on a cross-country ski trip during her Christmas vacation and will be bed-bound for the next three weeks, The New York Times reports. NEW YORK TIMES
A Roadblock to Brawny Bank Reform  | Tougher capital rules for the banking industry are still awaiting approval, Gretchen Morgenson writes in the Fair Game column in The New York Times. NEW YORK TIMES
JPMorgan Settles Suit with Pittsburgh Bank  | JPMorgan Chase has agreed to settle a lawsuit brought in 2009 by the Federal Home Loan Bank of Pittsburgh related to losses on $1.8 billion of mortgage-backed securities the bank bought before the financial crisis, Bloomberg News reports. JPMorgan settled without releasing terms of the deal after a judge ordered the bank to hand over the government’s draft complaint at the center of the $13 billion settlement with regulators in November. BLOOMBERG NEWS
