Madoff Trustee Sues JPMorgan for $6.4 Billion

The trustee who is tracking down assets for the victims of Bernard L. Madoff’s Ponzi scheme sued JPMorgan Chase for $6.4 billion on Thursday, contending that the bank bears some responsibility for the losses of victims because it continued to serve as Mr. Madoff’s primary banker despite growing evidence that he was running an enormous fraud.

“Madoff would not have been able to commit this massive Ponzi scheme without this bank,” David J. Sheehan, a lawyer for the trustee, Irving H. Picard, said in a statement after the case was filed in United States District Court in Manhattan.

The complaint was filed under seal to conform with a confidentiality agreement the bank negotiated with the trustee when it first began responding to his document requests.

According to Mr. Sheehan, the lawsuit contends that JPMorgan ignored “clear, documented suspicions” about Mr. Madoff.

Moreover, he said, the bank should have spotted highly suspicious cash movements through Mr. Madoff’s accounts and recognized them as hallmarks of a Ponzi scheme.

In a statement on Thursday, JPMorgan called the trustee’s claims “irresponsible and overreaching” and said it had no advance knowledge that anything was amiss at Mr. Madoff’s firm.

Read the rest here.