I think we can safely say that the preponderance of the evidence indicates that the Wall St. bankers are an outright criminal class. Does anyone other than Jamie "bankers, bankers, bankers" Dimon still say otherwise? It's time we stopped talking about whether they're criminals and started insisting that these people go to jail:
J.P. Morgan Chase & Co. ignored or dismissed warning signs about the Madoff fraud even as it earned hundreds of millions of dollars from its relationship with his firm, according to a lawsuit unsealed Thursday.
J.P. Morgan Chase stood "at the very center" of Bernard Madoff's fraud, according to a lawsuit unsealed Thursday. Michael Rothfeld has details.
The $6.4 billion lawsuit, filed in federal bankruptcy court, claims that bankers at J.P. Morgan discussed the possibility that Bernard Madoff was operating a Ponzi scheme, worried that a firm of such size was audited by a storefront accountant and called his returns "too good to be true."
"While numerous financial institutions enabled Madoff's fraud, JPMC was at the very center of that fraud, and thoroughly complicit in it," according to the 115-page lawsuit, filed under seal in December by Irving Picard, the trustee seeking to recover money for Mr. Madoff's victims and made public on Thursday.
J.P. Morgan said in a statement that the lawsuit "is meritless and is based on distortions of both the relevant facts and the governing law." The bank said it "did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff."
The complaint seeks the return of nearly $1 billion in J.P. Morgan's profits and fees, and $5.4 billion in damages. It goes into great detail about the bank's alleged efforts, starting in about 2006, to make money by offering products tied to Mr. Madoff through investment funds that fed money to him.
J.P. Morgan only reported its suspicions of Mr. Madoff to British authorities in late October 2008, two months before he surrendered, the lawsuit said. In a suspicious activity report filed with Britain's Serious Organised Crime Agency, the bank said the performance of Mr. Madoff's investments appeared to be "too good to be true—meaning that it probably is."
Even that warning was made in passing, the lawsuit said. It came after a London employee of J.P. Morgan was threatened while trying to redeem the bank's money from a Madoff-related fund by a fund employee who mentioned having "Colombian friends" who could "cause havoc," adding, "we know where to find you."
