JP Morgan Chase Sued For "Abetting" Madoff Fraud

When disgraced financier Bernie Madoff's massive ponzi scheme was brought to light, one of the few people or institutions close to him to escape the affair relatively unscathed was JP Morgan Chase Bank.

Many at the time, however, wondered how Chase, Madoff's bank, could not have known something was amiss.

Now, almost two years after the scandal broke, the trustee trying to recover money for investors cheated by Bernard Madoff is suing JP Morgan Chase for $6.4 billion, saying the bank had a central role in abetting the disgraced financier as he carried out his fraud, the Associated Press reports.

Trustee Irving Picard announced Thursday the filing of the lawsuit in U.S. Bankruptcy Court in New York.

Picard alleges the bank ignored the fraud and collected fees and profits, even though it had well-documented suspicions about the scam.

"JP Morgan was willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff," said David Sheehan, Picard's lawyer, in a statement, reports Forbes.com.

Sheehan also said that JPMorgan "was at the very center of that fraud, and thoroughly complicit in it."

The lawsuit seeks to recover at least $1 billion in fees and profits and $5.4 billion in damages to be distributed to Madoff victims. The victims lost billions after Madoff revealed in December 2008 that his investment company was a gigantic fraud.

[ddal10]

About time! Send ALL the BANKSTERS TO PRISON! Don't send them to Club Fed either. Send them to State Penns with all of the other Human Animals and let them get their Daily Beef Injections From BUBBA!

[spaceatoms]

And the Chinese loans are paying for the war in Afghanistan; disarm all the nukes and stop the globalization and consumption. The bailout was the single dumbest move in the history of the United States.

[newsterI]

Best part of that article was:


(retaining with high wages and benefits) "The best and the brightest? Is this guy serious? As of Sunday, AIG stock had gone down 99 percent over the past year because of these geniuses. But we have to worry they might quit and go elsewhere?

"Fine. Let them go. Maybe they can get jobs in Zimbabwe, where kleptocracy is official policy. I think some of them would feel more comfortable there."

[newsterI]

March 17, 2009 1:07 PM
Excessive Righteous Indignation Over AIG Bonuses


Sen. Charles Grassley, R-Iowa, has some harsh advice for AIG executives who took a share of the $165 million in bonuses paid out last week.

Speaking to a Cedar Rapids, Iowa, radio station, Grassly said, "I suggest, you know, obviously, maybe they ought to be removed. But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.

"And in the case of the Japanese, they usually commit suicide before they make any apology."

(CBS)
The senator, at left, wasn't really advocating ritual Japanese suicide for the AIG executives, and later qualified his excessively righteous remarks of indignation as an appeal for apology, remorse and contrition from AIG executives.

Grassley joins a chorus of Capitol Hill voices making clear to their constituents that they are just as outraged as they are about the AIG bonuses and bailout.

President Obama said he was "choked up with anger."

Sen. Christopher Dodd, D-Conn., suggested that AIG bonus recipients pay a provisional tax to recoup taxpayer dollars.

House Minority Leader John Boehner, R-Ohio, pivoted politically on the bonus problem, saying that it helped confirm his belief that Republicans should not support a bailout expansion for banks.

The wagons are circling around the AIG bonuses as if it were Custer's Last Stand, creating a major distraction for the Obama administration, which until recently assumed that AIG was contractually obligated to pay the bonuses.

Speaking on CBS News' Face the Nation on Sunday, Lawrence Summers, Director of the White House National Economic Council, called the AIG bonus situation "outrageous," and then went on to explain the government's take on the bonuses:

"If we simply throw up our hands, refuse to deal with any of this, we'll have the kind of financial catastrophe that we saw after what happened at Lehman Brothers. [Treasury] Secretary Geithner has negotiated very forcefully with AIG. He has done everything that is legally permissible for the government to do to limit the payment of bonuses. But where there are contracts, binding contracts that were entered into long before the government put any money in to AIG -- we're not a country where contracts just get abrogated willy-nilly."

On Monday, Mr. Obama said he would ask Treasury Secretary Timothy Geithner "to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole."

But it appears, the legal avenues have been explored and discounted, based on Summers' statement (see Andrew Cohen's post on legal issues surrounding the bonus payments).

AIG CEO Edward Liddy defended the bonus payments as necessary to attract and retain "the best and brightest talent to lead and staff" and that compensation should not be subject to "continued and arbitrary adjustment by the U.S. Treasury."

Politico's Roger Simon didn't buy into Liddy's defense:

"The best and the brightest? Is this guy serious? As of Sunday, AIG stock had gone down 99 percent over the past year because of these geniuses. But we have to worry they might quit and go elsewhere?

"Fine. Let them go. Maybe they can get jobs in Zimbabwe, where kleptocracy is official policy. I think some of them would feel more comfortable there."

LOL ROTFLMAO so good!!!! so good!!!

[ludvig1-2009]

The efficiency of the private sector and capitalism at work. The most amazing idea of the last century came from a government worker working at a patent office. The private sector has nothing to compete with that other than pure greed.

[PR_in_Alabama]

JP Morgan Chase Sued For "Abetting" Madoff Fraud


watch all top management resign in the next few weeks!!

[liberalme]

With enough money to never have to work again!

[DocD--2008]

The big question is, how much of this 6.4 Billion goes to the lawyers in this case? I bet most of it..

[newsterI]

y DocD--2008 December 2, 2010 6:52 PM EST
The big question is, how much of this 6.4 Billion goes to the lawyers in this case?"

None, they aren't going to win, they would have to PROVE their allegations in court, and even if Chase had "suspicions" well, "suspicions" are not FACTS, or PROOF by any stretch.
They are just trying the usual standard today, going after the biggest pockets in hopes of wangling something.
Chase has a law TEAM on the payroll and a LOT of clout.

[rykatspop]

It will be amazing how these so-called financial gurus all of the sudden become stupid victims of Madoff's scheme, too. How THEY were duped like everyone else. Then, like OJ Simpson's trial taught us, how much justice can you afford as these dirtbags plead the 5th for 2 years? You know, Hitler was a monster, but maybe he had it right about bankers. Nothing against Jews, just Wall Street bankers in general. None of this is funny.

[newsbarn]

and these are the folks that the republicans want to extend tax breaks, because they are so good at creating jobs! bwaahahahaha

[noloyalisti]

Madoff was just a sacrifice for the filthy rich crooks that run the banks and Wall Street. He is just the tip of the iceberg. An an illustration of our utterly corrupt and failed capitalist system.

Many of these corporate criminals still work for the Obama Administration. These Mafia type traitors have figured out how to infiltrate the government and run it for their profits and those of their corporate masters.