A federal judge has rejected $19 billion worth of claims against JPMorgan by Irving Picard, the trustee working on behalf of investors defrauded by Ponzi scheme head Bernie Madoff.
Colleen McMahon, the Federal Judge ruling in the case, said that the trustee did not have the standing to bring a common-law case against the financial institutions.
Earlier in the year Irving Picard filed the claims against JPMorgan, a bank used by Madoff as part of his scheme, stating that the financial institution had been “an active enabler” in the fraud.
UBS was also accused of ignoring warning signals and being involved in running two feeder funds on behalf of Madoff and his firm.
In an emailed statement from Picard, which was quoted by Bloomberg, the trustee said: “The trustee and his counsel remain confident in the cases brought against JPMorgan Chase and UBS and related entities as well as in the trustee’s standing to pursue all the claims in connection with those cases.”
Irving Picard is planning on launching an appeal against the judge’s verdict, while both banks said they were pleased with the decision.
Madoff pleaded guilty to running the Ponzi scheme, which is believed to be the largest of its kind in corporate history - he is currently serving a 150 year prison sentence.
By Jim Ottewill