JPMorgan Chase faces $19 billion lawsuit from Madoff victims

Bank hit with class action lawsuit claiming willful ignorance of fraud

Two victims of Bernard Madoff’s Ponzi scheme filed a class action lawsuit Monday against JPMorgan Chase & Co. (JPMC), claiming the bank willfully ignored signs of fraud.

Stephen and Leyla Hill say in the complaint that JPMorgan was “at the very center of that fraud, and thoroughly complicit in it.”

“JPMC chose to enable Madoff’s fraud, not just through the various ways it participated in his activity, but by helping to cover Madoff’s naked theft with the imprimatur of a globally recognized financial institution,” the lawsuit states.

The two ex-clients say in the lawsuit the bank could have performed even a cursory examination of Madoff Investment Securities LLC and discovered the scheme, but deliberately failed to do so.

JPMorgan was Madoff’s bank for two decades and faced a similar lawsuit last week, filed by Irving Picard, the Madoff trustee seeking money to repay victims.

Because the bank argued that Picard had no evidence that anyone there knew of Madoff’s scheme, U.S. District Court Judge Colleen McMahon threw out Picard’s suit and ruled that only victims of the scheme can pursue such claims, sparking Monday’s filing by the Hills.

The two investors are seeking $19 billion in the lawsuit, while Picard is likely to appeal the ruling after filing more than a thousand “clawback” lawsuits. 

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