The US financial services organisation JPMorgan Chase & Co is being sued in a class action lawsuit filed by former customers of Bernard Madoff, who is now in prison for masterminding one of the largest financial frauds in US history.
This latest lawsuit comes soon after a similar suit filed by Irving Picard, the trustee attempting to recover money for Madoff’s victims, was dismissed by a US District Court Judge. At the time, it was ruled that only the actual victims of the Ponzi scheme could pursue claims, which has now led to this latest action.
In the lawsuit, JPMorgan Chase & Co, which was Madoff’s bank for nearly two decades, is accused of wilfully ignoring the signs of fraud, as well as being “thoroughly complicit” in hiding the former stockbroker’s fraud.
It is claimed that even a cursory look at Madoff’s finances would have revealed his illicit activities, but this was not done. The lawsuit states:
“JPMC chose to enable Madoff’s fraud, not just through the various ways it participated in his activity, but by helping to cover Madoff’s naked theft with the imprimatur of a globally recognized financial institution.”
The lawsuit seeks to recover $19 billion from the bank, which will need to rely heavily on its professional indemnity insurance if it loses the case.