Irving Picard, the trustee charged with recovering the billions lost by victims of Bernard Madoff's imfamous ponzi scheme, is filing a lawsuit against the bank JP Morgan for $6.4bn (£4.1bn). He alleges that the bank played a central role in perpetuating Madoff's fraudulant actions.
David Sheehan of Baker & Hostetler, legal counsel for Picard, said that "JP Morgan was wilfully blind to the fraud, even after learning about numerous red flags surrounding Madoff," and that the bank was "at the very centre of that fraud, and thoroughly complicit in it".
JP Morgan had suspicions regarding Madoff's operations even before his arrest, the complaint claims. The bank admitted that Bernard L Madoff Investment Securities (BLMIS)'s "returns were too good - especially in down markets - to be believable, but for years they pretended that was not the case," said Deborah Renner, a partner at Baker & Hostetler.
JP Morgan has strongly denied all charges and intends to defend itself "vigorously".
Madoff lost billions of his victims' money when his business was exposed as a giant fraud in December 2008, and he is currently serving 150 years in prison.