Madoff Trustee Sues JPMorganBy THOMAS KAPLAN
2:02 p.m. | Updated The trustee seeking to recover funds for the victims of Bernard L. Madoff’s Ponzi scheme sued JPMorganChase on Thursday for $6.4 billion, accusing it of profiting from the huge fraud in its role as the primary banker for Mr. Madoff’s investment company.
The lawsuit, filed in federal bankruptcy court, is seeking to recover nearly $1 billion in fees and profits as well as $5.4 billion in damages.
The trustee, Irving H. Picard, faces a deadline this month for filing so-called clawback lawsuits seeking to recover money for Mr. Madoff’s victims. Last week, he sued UBS and its feeder fund affiliates, accusing the big Swiss bank of profiting from the fraud in its role as the sponsor of several big international feeder funds that funneled investors’ money to Mr. Madoff.
The lawsuit against JPMorgan was filed under seal. But in a statement, Mr. Picard’s lawyers said that the lawsuit asserted that JPMorgan ignored “clear, documented suspicions” about the legitimacy of Mr. Madoff’s firm and also should have spotted illegal cash flows relating to Mr. Madoff’s fraud.
“Madoff would not have been able to commit this massive Ponzi scheme without this bank,” said one of the lawyers, David J. Sheehan.
In a statement, JPMorgan called Mr. Picard’s claims “irresponsible and overreaching” and said it had no knowledge that something was amiss with Mr. Madoff’s firm.
“Any suggestion that JPMorgan supported Madoff’s fraud is utterly baseless and demonstrably false,” the bank said, adding that it has made a “significant effort” to assist Mr. Picard in his investigation the last two years.
