JP Morgan Sued Over Investments With Madoff

JP Morgan Chase has been sued over its alleged dealings with Bernard Madoff. According to Bloomberg news, JP Morgan was aware of Madoff’s Ponzi scheme, but did not disclose the scheme in order to protect its own interests.

According to the lawsuit, JP Morgan had investors put money into two hedge funds that invested with Madoff. The bank then invested $250 million of its own money into the funds. However, the JP Morgan began to withdraw its own money without informing its clients.

The lawsuit was filed by MLSMK Investments. The complaint alleges that JP Morgan, “began to grow suspicious of Madoff’s results and embarked on a due diligence investigation of Madoff’s operations.” The investigations concluded that Madoff could not possibly be making the returns he was claiming, and therefore, JP Morgan began to liquidate its position.

The lawsuit is seeking $12.8 million in compensatory damages as well as punitive damages.

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