Madoff trustee Irving Picard filed an amended complaint in U.S. District Court against JPMorgan Chase & Co., JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities Ltd. (collectively "JPMorgan").  The amended complaint, based on expanded allegations, includes a jury demand and now seeks life-to-date damages. 

As a result, the Trustee now seeks to recover at least $19 billion in damages from JPMorgan, up from $5.4 billion in damages previously sought.  That's in addition to $1 billion in fraudulent transfers and equitable claims the trustee seeks to recover.  All recovered monies would be placed in the Bernie Madoff & Co. Customer Fund and distributed, pro rata. 

Trustee’s amended complaint "adds new evidence and expands our previous allegations that JPMorgan was an active enabler of the Madoff Ponzi scheme.  As alleged in the amended complaint, JPMorgan not only should have known that a fraud was being perpetrated, they did know."  -- David Sheehan, counsel for Trustee, a partner at Baker & Hostetler.

“They could see that money customers deposited into BLMIS’s main account was not used to buy or sell securities.  They could see that it was merely transferred to other customers, in patterns serving no legitimate business purpose. They could see millions of dollars routinely bouncing back and forth between Madoff and JPMorgan Private Banking customers.  They could see that Madoff’s regulatory filings were materially inconsistent with BLMIS’s actual finances.  Yet, as alleged, they allowed the fraud to continue."  -- Deborah Renner, another B&H partner.

Further Allegations Against JPMorgan.   New allegations of suspicious banking activity are based on information from 2 former employees of an unnamed financial institution who, in 1997, observed and investigated Madoff’s nearly daily circular transactions between an account Madoff controlled at that particular financial institution and Madoff’s JPMorgan account  - then, The Chase Manhattan Bank.  The amended complaint alleges that an investigator from the aforementioned financial institution questioned Madoff’s staff about the transactions and failed to receive a satisfactory explanation from them.  The financial institution, seeing no legitimate business purpose for the circular transactions, closed Madoff’s account.

JPMorgan's Motion to Dismiss.   On 6/3/11, attorneys for JPMorgan filed a motion to dismiss the Trustee’s original.  Under the Federal Rules of Civil Procedure, the Trustee then had up to 21 days to submit an amended version of his complaint, and today’s filing meets that deadline.  JPMC now has until 8/1 to respond to the amended complaint.  A copy of the filing will be made available on the Trustee's website at www.madofftrustee.com.   It also can be found on the Bankruptcy Court’s website as Case No. 10-4932 (BRL) or on the District Court’s website as Case No. 11-CV-00913(CM)(MHD) at www.nysb.uscourts.gov.   [Business Wire,  06/24/11]