Bernard Madoff $50 Billion Ponzi Scheme

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U.S. judge approves JPMorgan's $543 million deal to settle Madoff claims

By Joseph Ax
NEW YORK Tue Feb 4, 2014 3:13pm EST
http://www.reuters.com/article/2014/02/04/us-jpmorgan-madoff-idUSBREA131HN20140204?feedType=RSS&feedName=businessNews

(Reuters) - A federal bankruptcy judge on Tuesday approved JPMorgan Chase & Co's (JPM.N) $543 million deal to end two private lawsuits stemming from its relationship with convicted Ponzi scheme mastermind Bernard Madoff.

A spokeswoman for the trustee liquidating Bernard L. Madoff Investment Securities LLC confirmed that U.S. Bankruptcy Judge Stuart Bernstein approved the agreement, which was made public on January 7, the same day federal authorities announced the bank had agreed to pay more than $2 billion to settle criminal charges related to the Madoff fraud.

JPMorgan will pay $218 million to resolve class-action litigation and $325 million to resolve claims brought by the trustee, Irving Picard.

A JPMorgan spokesman declined to comment.

Madoff was a longtime client of the bank, which was accused of turning a blind eye to suspicious activity within his accounts that suggested fraud.

Picard has estimated that the Ponzi scheme, the largest in history, cost investors more than $17 billion of principal. To date, he has recovered more than $10 billion for victims, including the JPMorgan settlement.

Madoff, 75, pleaded guilty in 2009 and is serving a 150-year sentence. Five of his former aides are currently on trial in New York federal court on charges that they helped Madoff perpetuate his scheme.

In all, JPMorgan recorded approximately $20 billion of legal settlements in 2013, including $13 billion to resolve claims related to mortgages it packaged leading up to the financial crisis.

The bankruptcy case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court for the Southern District of New York, No. 08-1789.

(Reporting by Joseph Ax; Additional reporting by Nate Raymond; Editing by Dan Grebler)

http://www.reuters.com/article/2014/02/04/us-jpmorgan-madoff-idUSBREA131HN20140204?feedType=RSS&feedName=businessNews