Just a week after a federal judge tossed the Bernard Madoff receiver's lawsuit against JPMorgan Chase, a pair of Madoff investors has taken her reasoning to heart.
The investors, Stephen and Leyla Hill, filed a $19 billion lawsuit against the bank, accusing it, as did trustee Irving Picard before them, of ignoring red flags that pointed to Madoff's $65 billion Ponzi scheme.
"JPMC chose to enable Madoff's fraud, not just through the various ways it participated in his activity, but by helping cover Madoff's naked theft with the imprimatur of a globally-recognized financial institution," the lawsuit, which seeks class-action status, alleges. The Hills call JPMorgan "thoroughly complicit" in Madoff's fraud and alleged that it could have been uncovered by the simplest of examinations of Madoff's operation.
The Hill lawsuit seeks the same amount as the Picard lawsuit junked last week. In her ruling, U.S. District Judge Colleen McMahon said that Picard did not have standing to sue third parties on behalf of Madoff victims. Picard's lawsuits against UBS, HSBC Holding and UniCredit, totaling more than $10 billion, fell under the same reasoning.
Picard has appealed those rulings.