Hindsight

JP Morgan Chase Suspected Madoff

This has to be cold comfort for the thousands of people wronged by Ponzi schemer Bernard Madoff. Court documents reveal that two months prior to Madoff’s arrest for fraud, JP Morgan Chase suspected the investment banker of wrongdoing, but the bank continued to do business with him—prompting lawyers representing Madoff’s victims to file a $6.4 billion lawsuit against the bank. In a “Suspicious Activity Report” by JP Morgan Chase’s London office, the bank called Madoff’s profits “too good to be true.” One of the lawyers representing the victims called JP Morgan Chase “willfully blind” to the fraud, but the bank dismissed that it had done anything wrong. A similar suit filed by Florida investors claiming the bank was liable was thrown out in July 2010.