JPMorgan Sued by Madoff’s Investors Over Fraud Losses

[The Straight Story]

JPMorgan Sued by Madoff’s Investors Over Fraud Losses

Nov. 7 (Bloomberg) -- JPMorgan Chase & Co. was sued by two investors who claim the bank was “at the very center” of Bernard Madoff’s Ponzi scheme.

The investors, Stephen and Leyla Hill, claim JPMorgan should have been aware that Bernard L. Madoff Investment Securities LLC was passing all the money he stole from customers through a JPMorgan account known as the “703 Account.” They seek to represent all investors who had money invested with Madoff in December 2008, when he was arrested and the fraud collapsed. He was convicted and sentenced to 150 years in prison.

“While numerous financial institutions enabled Madoff’s fraud, JPMC was at the very center of that fraud, and thoroughly complicit in it,” the Hills said in a complaint filed today in Manhattan federal court. “JPMC could not perform even cursory due diligence on Madoff or BLMIS without bumping up against evidence of Madoff’s fraud.”

The suit comes a week after a judge dismissed $19 billion in claims by the trustee liquidating Madoff’s former firm. On Nov. 1, U.S. District Judge Colleen McMahon in Manhattan ruled that the trustee, Irving Picard, isn’t the legally appropriate party to demand common-law damages on behalf of former Madoff investors such as the Hills.

http://www.businessweek.com/news/2011-11-07/jpmorgan-sued-by-madoff-s-investors-over-fraud-losses.html

[sarcasmo]

1. This will be an interesting suit. No surprise JPMorgan & Chaser were in the middle of this mess.