JPMorgan Chase has been warned by the Treasury Department’s Inspector General Eric Thorson to cooperate with U.S. regulators who are probing the bank’s relationship with Ponzi king Bernard Madoff. A letter from the Treasury Department sent in December 2012 to JPMorgan has asked the company to provide the Office of the Comptroller of the Currency with documents it has been unable to obtain from JPMorgan until now.
However, JPMorgan has apparently taken the stance that handing over the documents would constitute violation of its attorney-client privileges, though the Treasury Department is rejecting that argument and has asked JPMorgan to inform by January 11, how it is going to resolve the dispute.
Bloomberg News reported that Eric Thorson, the Inspector General of the Treasury observed in the letter to JPMorgan that “The OCC could not do its work and carry out its authority under its examination statute … if that statute was interpreted or operated to bar access to bank records for which a claim of privilege was made.”
The OCC, which is an independent regulator within the Treasury Department, referred the matter to the Inspector General of the Treasury to determine whether JPMorgan was rightfully blocking OCC’s access to the documents.
JPMorgan spokeswoman Jennifer Zuccarelli said that the confidentiality of the documents are ensured by attorney-client privilege, and while “This dispute does not go to the merits of the matter … it does raise an important issue of principle: whether we and other banks – large and small alike – have the fundamental right, long recognized in this country, to communicate freely with and seek confidential guidance from their lawyers.”
Zuccarelli confirmed that the company would continue to work with OCC and the Treasury Department to resolve the matter.