JPMorgan calls for Madoff Trustee lawsuit to be dismissed

3 August 2011

JPMorgan has called on a lawsuit filed against it on behalf of victims of Ponzi scheme fraudster Bernie Madoff to be dismissed.

The claims follow a decision by US District Judge Jed Rakoff to throw out a case against HSBC Holdings by Irving Picard, trustee for the liquidation of the Madoff group.

According to Reuters, Picard’s case for an estimated $9 billion in damages was dismissed by the judge who said the trustee did not have the standing to sue banks on behalf of fraud victims who failed to realise they were being duped.

Picard tripled its lawsuit against JPMorgan during June calling for more than $19 billion in damages on behalf of its clients.

In its filing, JPMorgan said there was no evidence to prove that any of the bank’s staff possessed "actual knowledge" of the fraud, or to "substantiate his utterly implausible theory that JPMorgan deliberately collaborated with Madoff in perpetuating a Ponzi scheme in order to earn routine banking fees".

Picard is believed to have filed more than 1,000 lawsuits seeking damages on behalf Madoff’s victims.

By Jim Ottewill

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