JPMorgan Chase Fires Back At Madoff Trustee

(By Jonathan Stempel) JPMorgan Chase & Co accused the trustee seeking $6.4 billion for victims of Bernard Madoff's Ponzi scheme of doing an end run around the law in pursuing his case, and said it has a right to a jury trial.

The second-largest U.S. bank said court-appointed trustee Irving Picard is exceeding his power by suing in bankruptcy court, where a judge rather than a jury would decide the case.

"The trustee's massive damages action against JPMorgan bears no resemblance to a typical lawsuit commenced by a bankruptcy trustee," JPMorgan's lawyers said in a court filing late Tuesday.

"In substance," the bank said, "the trustee is trying to pursue an enormous back-door class action."

A spokesman for Picard did not immediately respond to a request for a comment.

JPMorgan asked U.S. Bankruptcy Judge Burton Lifland, who oversees the Madoff proceedings, to move Picard's lawsuit to federal district court, where it can demand a jury trial.

In court papers unsealed on February 3, Picard accused JPMorgan of having significant doubts about Madoff but silently acquiescing in his fraud, hoping to preserve its own investments and a more than 20-year business relationship.

JPMorgan has said it did not know about or assist in the estimated $65 billion Ponzi scheme.

Madoff, 72, pleaded guilty in March 2009 and is now serving a 150-year sentence in a North Carolina federal prison.

The case is Picard v. JPMorgan Chase & Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-04932.

(Additional reporting by Santosh Nadgir in Bangalore, editing by Maureen Bavdek)

Copyright 2010 Thomson Reuters. Click for Restrictions.

Comments

[reluctantWASP]

04:21 AM on 02/11/2011

Ok, I'm a little miffed that they keep referring to these people as "victims". While there were a small amount of small investors who got harmed by Madoff, who do deserve reparations and sympathy, the vast majority of the investors in his fund could be deemed high net worth individuals. These are people with ample education and ready access to financial advisors. While I am no where near the level of a financial wizard, I do know that the number one rule of investing id diversification. So what would make this many people, who should know better, hand over all their money to one person? The simple answer is greed. They really thought that they were getting these huge returns, and they didn't care how it was happening. From everything I've read and seen regarding Madoff's operations, it seems had any of these investors asked even the most rudimentary questions, they would have had reason to suspect something was up, Apparently, these people didn't bother as long as the huge returns presumably poured in. These people can not be called "victims", but they can be called greedy.

[kamact]

12:13 AM on 02/11/2011

This is what expensive lawyers and PR firms are to say to protect corrupt, and powerful clients,...so believe it

[Olderandwiser55]

09:30 PM on 02/10/2011

They want a jury....that could be amusing

[Jackie O]

09:48 PM on 02/09/2011

Wheres Andrew Maguire?

Crash JP Morgan BUY SILVER

[Matt12]

09:16 PM on 02/09/2011

The sad truth is that there are 6 million ponzi scamers in the US who should be in jail

[Bat Wrangler]

07:14 PM on 02/09/2011

Who is JPMorgan Chase to be criticizing anybody for shoddy business practices? Attacking Bernie Madoff is like one crook accusing another crook of stealing.

[madeinusa]

06:50 PM on 02/09/2011

come on people,these are rich people.nobody rich goes to jail,unless of course they steal from other rich people.they are allowed to make risky loans that bring down 99% of us and they get rewarded with a bailout from your corporate owned government.i just wish the clueless millions would wake up and organize and unite to take back this government.ahhh nice dream,too bad that's all it is.

[nopilikia]

04:07 PM on 02/09/2011

JP Morgan getting it in the "back door" rather than giving it to the American taxpayer in the "back door"..... priceless.

[Retrofuturistic]

02:36 PM on 02/09/2011

Uhhhh, it's pretty hard not to notice $65 billion....

[YOKEL13]

03:17 PM on 02/09/2011

Must be under Madoff's sofa cushions.

[rotorhead1871]

02:10 PM on 02/09/2011

TRIAL.....NOW!!!! JPM can cover the losses when they loose.....

[cats530]

01:18 PM on 02/09/2011

JPMs tactics are just like BOAs...In your face intimidation, then when you get to discovery, they quietly fold. Bring on discovery!

[squat6971]

12:36 PM on 02/09/2011

Put JPM down already

[PharmaCan]

12:29 PM on 02/09/2011

So Mr. Dimon doesn't like it when someone else does "an end run around the law". I guess he thinks that end runs around the law and back door deals are the sole province of Wall St.

Since he is such a fan of jury trials, how about we subject him and his cohorts to a jury's decision on the legality of their actions that contributed to the financial meltdown? I doubt he would be happy with the outcome!

[somsoc]

12:34 PM on 02/09/2011

Yes, just as in the feudal days of merry old England, the aristocracy has its own rules and makes its own laws, that is what this class w@rfare that Boehner, Palin, McConnell, and the whole of the GOBP and right wingnuts is all about, it is the establishment of the Feudal Theocratic States of America.

[nanimal]

01:28 PM on 02/09/2011

yes we are just serfs who don't deserve to walk on the same ground as Mr. Dimon. We also don't deserve health care, clean air, clean water, safe food, living wage jobs, to own a home and they are trying so desperately to make it so we can't vote either. How did we get here? I blame Reagan.

[Theatrixnyc]

12:41 PM on 02/09/2011

Very nice. I like the way you think...

[econ1]

12:26 PM on 02/09/2011

If they actually knew, the government should fire everyone at the SEC and hire JPMorgan.

[lushGreen]

12:12 PM on 02/09/2011

Ah Yeah, just put it in a prolonged battle, so you have more time to buy the Jury, hopefully the people waiting for the monies would be dead by the time it's over.