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- Inside Scaramucci’s Extreme Loyalty to Trump – William Cohan
- Who President Trump Can Pardon, and Who He Can’t
- Ex-UBS Compliance Officer, Day Trader Deny Insider Trading
- Private Equity’s Big Bets on Financial Tech
- Trump Reportedly Floats Making Rudy Giuliani Attorney General
- Mastercard Wins Dismissal of $18 Billion Class Action Suit
- Jailed Schroders Trader Also to Pay $456K for His 'Criminal Lifestyle'
- Raymond Lucia, Ex-Radio Host Asks U.S. Top Court to Rule On Administrative Law Judges
- As Trump Administration Circles the Drain, Anthony Scaramucci Finally Lands West Wing Job
- Internal Power Struggle Rattles Guggenheim Partners
- Why Most People Will Never Be Successful
- Top Deutsche Bank Trader Leaves After Risky Bets Led to $60Mn Loss
- Bank of America Picks Dublin as EU Hub Post Brexit
- E*Trade Rises 4% as Q2 Earnings Beat Estimates
- I Scream, You Scream, FINRA Screams For Ice Cream ... or ... FINRA Deep-Freezes Broker
- Senate Panel OK's David Kautter, Trump Pick for Top Treasury Tax Job
- OJ Simpson Granted Parole After 9 Years in Prison
- PayPal to Partner with JPMorgan
- BNY Mellon Beats on Q2 Earnings as Revenues Improve
- I Scream, You Scream, FINRA Screams for Ice Cream ... or ... FINRA Deep-Freezes a Broker
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NEWSLETTERS & ALERTS
JPMorgan Cleared in Madoff Lawsuit
A federal appeals court ruled on Wednesday that JPMorgan is not liable to a group of former clients of Bernie Madoff who blamed the bank for taking an active role in his Ponzi scheme while ignoring subsequent red flags from the scandal.
The 2nd U.S. Circuit Court of Appeals in Manhattan upheld the earlier ruling by federal judge John Koeltl who, in 2016, ruled that JPMorgan was, at most, negligent in its dealings with Madoff.
The suit was brought against JPMorgan by about 2,500 so-called "net winners" who withdrew more money from their accounts at Bernie Madoff & Co. - aka Bernard L. Madoff Investment Securities LLC - than they invested. These investors felt that their claims were undervalued in the liquidation of Madoff’s firm.
FINANCIALISH COMMENTS. Time has not changed our opinion that JPMorgan was grossly negligent in its relationship with master Ponzi schemer, Bernie Madoff. Yes, some years back JPMorgan anted up $2.4 billion to settle litigation related to Madoff and, yes, the bank acknowledged its responsibility for failing to stop Madoff in a settlement with the federal government.
That said, JPMorgan’s ‘do nothing, say nothing’ approach to Bernie Madoff has never been fully explained – or, for that matter, fully investigated (to our satisfaction – although, who are we in this matter). After all, how could a custodian that presumably held billions of dollars for an investment advisor or a broker-dealer not investigate suspicious activities – or in this case, suspicious INACTIVITIES. Once red flags were noted, it seems probable that the bank would have some basis for concern, which it probably would have shared with regulators.
Unfortunately, little, if any, light has been shed on JPMorgan’s handling of Madoff’s billions. Of course, why would a banker wish to “upset the apple cart’, when such a relationship brings in hundreds of millions in fees and other revenue to the bank? [See Financialish, 3/4/11]
And so, with today’s ruling, another chapter in this sordid financial scandal ends. RIP.