JPMorgan Chase Says It Had No Duty to Mitigate Madoff Fraud

Bernard Madoff, the disgraced investment executive responsible for the biggest ponzi scheme in U.S. history, kept his client’s capital at the financial intermediary JPMorgan Chase.

A recently filed lawsuit by appointed trustee Irving Picard aimed at JPMorgan is seeking $6.4-billion in damages from the New York City-based investment bank, citing internal e-mails, among other communications, that allegedly proves JPMorgan knew something was off with Madoff’s account.

 More specifically, the communications between high-ranking managers at the bank showed concern over Madoff’s consistent profits that were believed not to be consistent with the macroeconomic environment, and that the profits could not have been sustainable under the then current market climate over that time period.

In a new court filing, JPMorgan Chase says the company did nothing wrong in mitigating the fraud, and that the company did not violate any standards or applicable laws.

The court filing from JP Morgan Chase warns the “trustee’s interpretation of federal banking law could impose [new] broad investigative duties on banks,”

Chase filed new motions that seek to have the staggering $6.4-billion suit tossed out of bankruptcy court, instead opting to move the proceedings to a New York federal district court where a jury would decide liability.

The company maintains it was under no obligation to monitor the account for fraudulent activity, despite the fact all of that capital was being held at the bank.

Madoff is currently serving a 150-year prison sentence.

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Ramy holds a Bachelor in Health Studies with honors in Health Management from York University in Toronto, Canada. He just returned to Toronto following a career opportunity teaching English in South Korea. Write to [email protected]
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