JP Morgan & The Bernie Madoff Connection
The trustee in charge of liquidating the business dealings of Bernie Madoff says JPMorgan Chase & Co. had long suspected that the disgraced financier was, in fact, conning investors, yet remained silent.
According to the lawsuit by trustee Irving Picard, JP Morgan was at the center of Madoff’s fraud and “thoroughly complicit” in it. The complaint says JPMorgan Chase had a good reason to look the other way, because it allegedly earned a half-billion dollars via its relationship with Madoff.
The $6.4 billion lawsuit, which was filed by Picard in December and unsealed last week, goes on to state that many of the bank’s executives strongly suspected Madoff was involved in fraudulent activity, yet never stepped forward to reveal the subterfuge.
As reported Feb. 3 by Bloomberg, the 114-page complaint contains damaging quotes from internal emails to support its allegations that JP Morgan knew or should have known that Madoff was running a Ponzi scheme.
“Incredibly, the bank’s top executives were warned in blunt terms about speculation that Madoff was running a Ponzi scheme, yet the bank appears to have been concerned only with protecting its own investments in Bernard L. Madoff Investment Securities LLC feeder funds,” said Deborah Renner, an attorney for Picard, in a statement.
Madoff, 73, was arrested in December 2008 and charged with running a $60-plus billion Ponzi scheme for at least two decades. He currently is serving a 150-year sentence in federal prison.
Meanwhile, in a statement, JPMorgan Chase calls Picard’s complaint “meritless” and based on distortions.