JPMorgan Slams "Back-Door" Madoff Lawsuit

In this March 10, 2009 file photo, Bernard Madoff exits Manhattan federal court in New York. (AP Photo/Louis Lanzano, file) AP Photo/Louis Lanzano

In this March 10, 2009 file photo, Bernard Madoff exits Manhattan federal court in New York. (AP Photo/Louis Lanzano, file)

In a lawsuit filed last week, lawyers demanded $6.4 billion for Bernard Madoff's victims, accusing executives at JPMorgan Chase of being complicit in the disgraced financier's massive fraud.

Now the second-largest bank in the United States is firing back.

According to Reuters, JPMorgan says court-appointed trustee Irving Picard is circumventing the law by suing in bankruptcy court. Such a trial would be decided by a judge, not a jury.

"In substance," Retuers quotes the bank as saying, "the trustee is trying to pursue an enormous back-door class action."

JPMorgan, which served as the now-imprisoned financier's primary bank for two decades, asked the bankruptcy judge overseeing the Madoff proceedings to move the lawsuit to federal district court, where the bank has the right to a jury trial. A spokesman for Picard did not respond to Reuter's request for a comment.

Last week, the lawyers working on Picard's behalf cited numerous emails implicating JPMorgan, including an unidentified bank employee recounting being told "there is a well-known cloud over the head of Madoff and that his returns are speculated."

The bank has denied having any suspicions about Madoff, saying it followed all commercial banking regulations in its dealings with him.

  • Stephen Smith

    Stephen Smith is a senior editor for CBSNews.com

Popular on CBS News

Comments

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Watch Now

New Android App

For your Android phone and tablet, download the FREE redesigned app, featuring CBSN, live 24/7 news.

Download