Trustee: JPMorgan Knew of Madoff's Ponzi Scheme

Newly revealed court documents in the Bernie Madoff case show that JPMorgan Chase had serious doubts about the con man's investments more than a year before the bottom fell out—but kept right on letting him move billions in investor cash through his accounts, reports the New York Times. Consider this damning email from June 2007, 18 months before Madoff's arrest: One risk management officer wrote than another bank exec “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme.”

Even before that, in 2006, another analyst told bosses that returns on one of Madoff's funds were hard to reconcile with reality. The trustee trying to get back investors' money has sued JPMorgan for $6.4 billion, and some of the documents related to the suit were opened to the public today. For its part, JPMorgan says the suit is “based on distortions of both the relevant facts and the governing law" and insists "it did not know about or in any way become a party to the fraud."
(More Bernard Madoff stories.)