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Banking Law

Madoff Trustee Sues JPMorgan Chase, Seeks $6B for Alleged Blind Eye to Massive Swindle

Posted Dec 2, 2010 3:31 PM CDT
By Martha Neil

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In a complaint filed under seal in U.S. Bankruptcy Court in Manhattan, a court-appointed trustee winding up the business affairs of convicted swindler Bernard Madoff has accused a major bank of aiding and abetting his record-breaking Ponzi scheme over a period of decades.

JPMorgan Chase & Co., which was Madoff's primary bank, was "was willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff," said attorney David Sheehan, who represents trustee Irving Picard, in a written statement, reports CNNMoney.

The suit seeks some $1 billion in alleged bank profits and another $5.4 billion in damages.

Chase called allegations that it aided the fraud "utterly baseless and demonstrably false" and said it followed the law and knew nothing of Madoff's wrongdoing, reports the Wall Street Journal (sub. req.). "JPMorgan intends to defend itself vigorously against the meritless and unfounded claims brought by the trustee," the bank continued.

Picard has filed more than 100 lawsuits against "net winners" surrounding Madoff as a Dec. 11 deadline , to launch such so-called clawback lawsuits looms, the newspaper notes.

Additional coverage:

Bloomberg: "JPMorgan, Madoff's `Primary Banker,' Is Sued for $6.4 Billion by Trustee"

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