JP Morgan Chase Sued For Part In Madoff Ponzi Scheme
The trustee charged with liquidating the business of jailed Bernie Madoff, Irving H. Picard, filed a $6.4 billion suit against JP Morgan Chase for their part in the $65 billion Ponzi scheme. The allegations are that JP Morgan Chase aided and abetted Madoff’s fraud by failing to act even though numerous red flags warned them of the very fraud taking place. David J. Sheehan, counsel to Picard, said that “JPMC was at the very center of that fraud and thoroughly complicit in it.” Any monies recovered from JP Morgan Chase will be returned to the victims of the fraud on a pro rata basis, according to the trustee.
The Investment News reported on December 2, 2010 that this is the second largest suit filed by Mr. Picard in the Madoff bankruptcy. In May 2009, he filed a $7.2 billion suit against investor Jeffry Picower, who later died in October 2009. Then last month, Picard sued UBS for $2 billion for their part in the fraud.
Bernie Madoff is currently serving a 150 year prison sentence for the largest Ponzi scheme in U.S. history causing investors to lose some $20 billion in principal.