Madoff Trustee Sues JP Morgan Chase

By Robert Davis
Feb 4 2011

Irving Picard, the trustee in charge of the Bernie Madoff estate, announced this morning that he has filed suit against US based bank JP Morgan Chase for their part in the Ponzi scheme carried out by Madoff.

According to the suit, JP Morgan Chase continued to send investors to the Madoff firm after they realized that he was running a scam. This, the suit alleges, is enough to say that the board of directors and high ranking executives in the bank, knew that the investment firm was a fraud and they should be held financially liable for the losses of the clients that they encouraged to invest.

However, the bank has fired back suggesting that they were a victim of the fraud just like anyone else. They stated in their response to the suit that they were part of the solution when the Madoff scam was discovered, handing off millions of documents from accounts held by the disgraced investor.

Nonetheless, the suit was accepted by the court and will go to trial unless the bank agrees to the settlement.

Picard has already recovered about half of the $20 billion that was stolen by Madoff and is looking for a way to get the other half.

He estimates that he will receive about $5 billion from the JP Morgan Chase suit if he is successful and he still has several other pending lawsuits that will likely bring in the rest when the suits are finally completed through the federal court system.