The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App

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