{"id":447593,"date":"2011-06-25T10:40:42","date_gmt":"2011-06-25T10:40:42","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/06\/25\/madoff-trustee-triples-jpmorgan-suit-to-19b\/"},"modified":"2011-06-25T10:40:42","modified_gmt":"2011-06-25T10:40:42","slug":"madoff-trustee-triples-jpmorgan-suit-to-19b","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/06\/25\/madoff-trustee-triples-jpmorgan-suit-to-19b\/","title":{"rendered":"Madoff trustee triples JPMorgan suit to $19b"},"content":{"rendered":"
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You Are Here: Home<\/a> \u00bb Africa\/International<\/a> \u00bb Madoff trustee triples JPMorgan suit to $19b<\/p>\n

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Page last updated at Saturday, June 25, 2011 10:10 AM \/\/ <\/span><\/div>\n

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Bernard Madoff – in prison for scam<\/p>\n<\/div>\n

The trustee seeking money for Bernard Madoff\u2019s victims is now demanding $19 billion in damages from JPMorgan Chase & Co, more than tripling what he hopes to recover from what had been the main bank for the now-imprisoned Ponzi schemer.<\/p>\n

The amended complaint by the trustee Irving Picard adds new charges and was filed three days after the second-largest U.S. bank agreed to pay $153.6 million to settle U.S. Securities and Exchange Commission fraud charges.<\/p>\n

Picard maintained that JPMorgan was \u201cthoroughly complicit\u201d in Madoff\u2019s fraud and ignored red flags. In his original complaint, made public in February, he had sought $6.4 billion, including $5.4 billion of damages and $1 billion for fraudulent transfers and claims.<\/p>\n

\u201cJPMorgan Chase chose to enable Madoff\u2019s fraud, not just through the various ways it participated in its activity, but by helping to cover Madoff\u2019s naked theft with the imprimatur of a globally recognized financial institution,\u201d the 155-page amended complaint said.<\/p>\n

The higher damage request reflects \u201clife-to-date damages,\u201d or what the trustee considers the minimum losses over the entirety of Madoff\u2019s Ponzi scheme.<\/p>\n

Picard is also seeking at least $500 million that JPMorgan made \u201coff the backs of Madoff\u2019s victims,\u201d and more than $400 million of alleged fraudulent transfers.<\/p>\n

Tasha Pelio, a JPMorgan spokeswoman, repeated in an email the bank\u2019s earlier statement that Picard\u2019s lawsuit is meritless and distorts the facts and law.<\/p>\n

\u201cJPMorgan did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff,\u201d she said. \u201cAt all times, JPMorgan complied fully with all laws and regulations governing bank accounts.\u201d<\/p>\n

Picard has filed roughly 1,050 lawsuits seeking more than $100 billion for former investors at Bernard L. Madoff Investment Securities LLC.<\/p>\n

\u201cBEFORE THEIR VERY EYES\u201d<\/p>\n

The amended JPMorgan complaint adds new allegations that another financial services company around 1997 investigated nearly daily transfers of $1 million to $10 million between Madoff\u2019s account there and his account at Chase.<\/p>\n

It said that company questioned Madoff\u2019s employees about the suspicious back-and-forth transfers. Having failed to be satisfied about them, they closed Madoff\u2019s account, it said.<\/p>\n

\u201cJPMorgan Chase\u2019s bankers literally watched the fraud unfold before their very eyes,\u201d Deborah Renner, a lawyer representing Picard, said in a statement. Both are partners at the law firm Baker & Hostetler.<\/p>\n

The amended complaint also discusses Madoff\u2019s longtime relationship with Sterling Equities, a private banking customer of JPMorgan founded by Fred Wilpon and Saul Katz, owners of the New York Mets baseball team.<\/p>\n

Picard has sued the Mets\u2019 owners for $1 billion, prompting them to enter talks to sell part of the team to hedge fund manager David Einhorn for $200 million. [ID:nN26247232] The owners have denied knowing Madoff was committing fraud.<\/p>\n

In a regulatory filing last month, JPMorgan estimated that as of March 31 it might have to pay out as much as $4.5 billion more for litigation than it had set aside for that purpose. It also said it faced more than 10,000 legal proceedings.<\/p>\n

Tuesday\u2019s SEC accord resolved charges that JPMorgan did not tell investors that a hedge fund helped shape \u2014 and then bet against \u2014 complex mortgage securities they bought.<\/p>\n

HSBC, BANK MEDICI, UNICREDIT ALSO SUED<\/p>\n

Picard\u2019s case against JPMorgan is being overseen by U.S. District Judge Colleen McMahon.<\/p>\n

It is one of three high-profile Madoff lawsuits that have been moved to federal district court, where juries can hear cases, from bankruptcy court, where Picard originally sued.<\/p>\n

U.S. District Judge Jed Rakoff is reviewing some issues in Picard\u2019s $9 billion case against HSBC Holdings Plc.<\/p>\n

Rakoff is also considering whether the trustee can invoke racketeering law in a $58.8 billion lawsuit against Italy\u2019s UniCredit SpA, Austria\u2019s Bank Medici AG and its founder Sonja Kohn, and other defendants.<\/p>\n

JPMorgan has until August 1 to respond to the amended complaint, Picard said.<\/p>\n

Madoff, 73, was arrested on December 11, 2008, and after pleading guilty is serving a 150-year prison sentence.<\/p>\n

JPMorgan shares fell 16 cents in after-hours trading, after closing Friday\u2019s session down 58 cents at $39.49.<\/p>\n

The cases are Picard v. JPMorgan Chase & Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-04932; and Picard v. JPMorgan Chase & Co et al, U.S. District Court, Southern District of New York, No. 11-00913.
Source: Reuters<\/p>\n

Comments<\/h4>\n<\/div>\n

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You Are Here: Home \u00bb Africa\/International \u00bb Madoff trustee triples JPMorgan suit to $19b Page last updated at Saturday, June 25, 2011 10:10 AM \/\/ Bernard Madoff – in prison for scam The trustee seeking money for Bernard Madoff\u2019s victims is now demanding $19 billion in damages from JPMorgan Chase & Co, more than tripling what he hopes to recover from what had been the main bank for the now-imprisoned Ponzi schemer. 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