Madoff Trustee Sues JPMorgan And Others, Seeking Billions

Dec 3 2010 | 7:44am ET

It's been a busy two weeks for the court-appointed trustee in the Bernard Madoff Ponzi scheme case: Irving Picard has filed more than 100 lawsuits against investors who received more than they invested, as well as against two of Madoff's banks.

None of the suits is bigger than the one filed yesterday against JPMorgan Chase, which Picard's lawyer accused of being "willfully blind to the" $65 billion fraud. Picard is seeking $6.4 billion from JPMorgan, the second-most he has sought from anyone.

JPMorgan "was at the very center of that fraud, and thoroughly complicit in it," David Sheehan, a lawyer for Picard, said. Picard is seeking $1 billion in fees and $5.4 billion in damages from the bank, which he called Madoff's "primary banker."

Details of the lawsuit are unclear—it was filed under seal after JPMorgan "designated virtually all of their information confidential," Picard said. JPMorgan called the lawsuit "irresponsible and over-reaching," and said it "did not know about or in any way assist in the fraud orchestrated by Bernard Madoff.

Picard filed a second lawsuit, also under seal, against an unidentified company, seeking $3.14 billion.

The two lawsuits follow one filed last week by Picard against UBS, which the trustee said pulled nearly $800 million from Madoff's funds in the three months before it collapsed and $1.1 billion more in the prior six years. Picard, who is seeking $2 billion, alleges that UBS "lent an aura of legitimacy" to Madoff.

Earlier this week, Picard filed 123 clawback lawsuits. Among the targets was Blue Star Investors, a fund of hedge funds managed by private equity legend Thomas Lee. Picard is seeking nearly $19.7 million in "other people's money" received by the Lee fund.

The flurry of activity comes as Picard faces a Dec. 11 deadline to file clawback suits. That date, next Saturday, is the two-year anniversary of Madoff's arrest. To date, Picard has filed lawsuits seeking the return of more than $25 billion; he has actually recovered about $1.5 billion.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note