So Did They or Didn't They?

(Posted on 04/02/11)

Did senior executives at JPMorgan Chase have concerns over Bernard Madoff's investment business? And if they did, when did those concerns surface? That's the question at the heart of a new lawsuit that was finally unsealed in an American federal bankruptcy court. The suit, which totals $6.4 billion USD, says JPMC not only knew, but allowed Madoff to continue his daily business right up until the day he was finally arrested. The suit also claims this knowledge was garnered a full year and a half before that now-infamous arrest.

The New York Times is reporting an email, sent by a high ranking management official in June, 2007, reported a "well known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme". That email is part of 123 page document that can be seen here.

And there's more. Accusations that another high ranking executive was "consistently steering clients away from investments" that Madoff was associated with are making the rounds. This official is quoted as having said the activities were "too difficult to ignore". It's important that perspective be kept - in early 2006, yet another official with JPMC told his superiors that there were big problems with Madoff's returns. Specifically, he said those returns were improbable and unrealistic because they were too good than the securities in his portfolio. Yet, the bank continued to allow Madoff to move billions of U.S. dollars, even after these three specific events and possibly more. Now, it appears the global bank had long since withdrawn the lion's share of its own $276 million USD investment.

It's no secret some insist that Madoff couldn't have even begun to build this incredible and deceitful scheme alone. Some have said the bank itself was part of the game plan, though that's not been proven. Now, though, with the unsealed documents (though parts are redacted), answers might finally be had in this ongoing and devastating betrayal that continues to affect countless folks around the world.