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Madoff Trustee Charges JP Morgan With "Enabling" Massive Fraud; Seeks Over $6 Billion In Recouped Profits And Damages
Madoff trustee charges JP Morgan with "Enabling" massive fraud; $1 billion in profits and $5.4 billion in damages sought to be recovered. Says JP Morgan had clear doubts about Madoff operation and should have been more vigilant about firm's cash flows.
From PRNewswire:
Irving H. Picard, the Trustee for the liquidation for Bernard L. Madoff Investment Securities LLC ("BLMIS") today announced the filing of a complaint in the United States Bankruptcy Court for the Southern District of New York against JPMorgan Chase & Co., JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities Ltd. (collectively "JPMC").
The complaint seeks to recover nearly $1 billion in fees and profits and an additional $5.4 billion in damages for JPMC's decades-long role as BLMIS's primary banker, aiding and abetting Madoff's fraud. All recovered monies will be placed into the Customer Fund and distributed, pro rata, to Madoff customers with valid claims, the rightful owners of those monies.
"JP Morgan was willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff," said David J. Sheehan, counsel for the Trustee and a partner at Baker & Hostetler LLP, the court-appointed counsel for the Trustee. "While many financial institutions enabled Madoff's fraud, JPMC was at the very center of that fraud, and thoroughly complicit in it. JPMC was BLMIS's primary banker for more than 20 years, and was responsible for knowing the business of its customers – in this case, a very large customer. Madoff would not have been able to commit this massive Ponzi scheme without this bank. JPMC should pay the price for its central role in enabling Madoff's fraud."
The complaint states JPMC had clear, documented suspicions about the legitimacy of BLMIS's operations. Instead of acting on that information, it simply continued to collect fees and profit from the fraud.
"JPMC admitted in the months before Madoff's arrest that BLMIS's returns were too good – especially in down markets – to be believable, but for years they pretended that was not the case," said Deborah Renner, a Baker & Hostetler partner representing the Trustee. "Just as in the children's fable, they knew the 'Emperor had no clothes,' but looked the other way, allowing the fraud to continue."
On the banking side, the complaint charges, JPMC should have been more vigilant in seeing illegal cash flows. Instead, "JPMC was willing to ignore decades of suspicious and inexplicable activity," said Ms. Renner.
"Given that the main BLMIS account was held by JPMC, the bank was in a perfect position to investigate," Mr. Sheehan said. "It had only to review its internal account records to determine whether there was a legitimate explanation for the cash moving in and out of the BLMIS accounts. And when there ultimately was suspicion of illegal activity, JPMC had a duty to take action. It failed to do so."
In addition to Mr. Sheehan and Ms. Renner, the Trustee acknowledges the contributions of the Baker & Hostetler attorneys who worked on this extensive filing: Jessie Gabriel, Seanna Brown, Jennifer Vessells, Lindsey D'Andrea, Lauren Hilsheimer, and Keith Murphy.
The full complaint was filed with the Bankruptcy Court under seal. "JPMC has designated virtually all of their information as confidential. While JPMC may want to hide the full extent of its significant role in the Madoff fraud from the public, we intend to move to have the complaint made public as soon as possible," said Mr. Picard.
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Madoff Trustees are mostly NYC attorneys, unless I'm mistaken, so part of me thinks there could be fire behind the smoke - i.e. if an attorney overseeing Madoff's former enterprise in dealing with creditors' claims states this, there is an intent to act on it.
They will settle out of court quicker then you can say Rothchild.
6 pieces of silver?
probably 10,000 bars of Rhodium. We are in the big leagues now.
settle? JPM don't do no settles! They are the great and powerful OZ......
this will never see the press again....and five years from now it will go away quietly...
the courts have already ditched the papers in their circular files...
anyone who doubts...well, just take a glance at the silver and gold markets....the Comex...activities of the last two hours of trading....
in the name of all that is transparent...JPM transparently it seems took down gold and silver and reaped millions....
those of us trading gold and silver all saw it..
will anyone make a peep?
will the authorities arrive?
will the CTFC do anything?
will Blythe Masters get charged under RICO?
don't make them laugh...they are the great and powerful OZ....
and they say who can have money and who can't.......
they are...JPM....good luck to this lawsuit, hope the paper didn't cost you much.
They are trying to muscle a settlement. JPM got muscled on worldcom, although Citi capitulated quicker than JPM.
My guess is they'll settle and we won't learn anything.
Mr. Market doesn't seem to care. JPM exploded to the upside, + 2.7% already.
Just give the SEC some time to prosecute this. I am sure they can get at least a penalty of $1000.00. In USD I bet.
So the accomplice has fingered the trigger man... There is no honor among thieves.
Jamie will settle for $6 billion face
of ultimatlely worthless 10 year Treasury strips
after consulting with Brian Sack.
The 10 year is building up a head of
steam to blow through a 3.1% yield
at which point Wikileaks will reveal
who the Bernanke is really working
for. It ain't Bernie Sanders.
Payment comes right out of US Treasury.
Can Jamie Dimond settle this and put the tab on his AMEX POMO card?
Of course. As we speak the Bernank
has lost complete control of the
yield curve to the banksters who want
you out of any high quality assets and into
the dogshit they are holding. The
Bernank lied when he said QE2 would
lower long term rates. The intent was
exactly the opposite.
Jamie probably told them to do it to cover even more heinous criminality. They will seal it all off within the case and that as they say is that.
He gets free bucks to buy off the lawyers this is just a benefit of being a member of the club.
Expected, no big deal.
I'm sure if you try hard enough you can blame everyone else except Madoff and the investors that gave him their money.
Who's next Jesus Christ? President Obama? Muhammed Ali?
Whenever I take money out of my pocket and give it to someone else for whatever reason, I only have myself to blame.
As Will Rogers once said, "The quickest way to double your money is to fold it in half and put it back in your pocket."
Ben Bernanke must be an origami master
While I agree with your views on personal responsibility, the idea that JPM is culpable is very credible, especially if they're on record doubting Madoff's legitimacy, all while collecting fees on a perceived scam.
As has been said by all from the day he confessed, there is no way he ran a ponzi of this size by himself. Meanwhile, the trustee has a fiduciary duty to the liquidation fund to pursue all of the profiteers.
Someone didn't read the small print.
You are not in the club , thus it seems strange even seedy to you.
YOU ARE NOT IN THE CLUB.
;)
Jamie can settle this with all the profits from his silver short . . . right, Blythe?
The only reason this is surprising is...
Nah, no surprise here.
LOL
Let the clusterfuck begin!
Another backdoor scam, make whole all Madoffs clients thru this JPM charge. The Federal Reserve will provide your tax dollars to make all the NY and Florida folks whole again. You just have to have the right last name.
It's a beautiful thing to behold, you have to admire the club.
Props to you Mr. Backdoor Ponzi Man.
(I do believe you are on to them)
The more fraud comes up (and that's a lot) the more equities grind higher. When all is said and done aka when DOW hits 36K and change the crash will be massive. Seems like another good day to buy some gold.
JPM Providing "means and instrumentalities"
In the end, it's really simple. Just follow the money....the money handlers are a much more accurate view of history than the politicians.
As the Creed of the Illuminati says, "The Ends Justify the Means"... The Ends is simply, who ended up with the power, and who ended up with the money, and under that stone you will find your crooks. The problem is, as one poster already stated, we are allowing the Accomplice to be in charge of finding the Crooks. Never going to get justice that way.
Paging Mr. Cuomo:
Isn't this criminal? The old "what did JP Morgan know and when did they know it?"
Madoff trustee charges JP Morgan with "Enabling" massive fraud; $1 billion in profits and $5.4 billion in damages sought to be recovered. Says JP Morgan had clear doubts about Madoff operation and should have been more vigilant about firm's cash flows.
Cuomo? Father of Sub-prime? Soon to take office of Governor of NY?
JPM can burn in hell...
But I read where Maddoff's niece was married to an SEC regulator.
No wonder he wasn't prosecuted for years, in spite of 7 different tip offs and whistlelblowers.
Have you never heard of "Professional Courtesy"?
So let me see if I have a clear picture here of what goes on in America these days. We have people like Maddoff who are corrupt. We have bankers like JP Morgan that are corrupt. We have politicians who are corrupt along with probably most of the financial markets.
Ain't America great and we wonder why kids grow up thinking that the world is their oyster. If you can't have something, then just steal it. Everyone else does. If your a bank in America or even in Europe, don't worry about failing, you have the American tax payer right there to bail you out and the best part is that we can print all the endless money we want to prop up the system.
Ever get the feeling that all of this nonsense is going to end badly? I do.Ha. Ha. This is really funny, if we can’t receive Justice through prosecution under the Rule of Law, (no mortgage fraud indictments) maybe we will find Justice and the Rule of Law in the DEFENCE of a fraud criminal! Ha. Ha.