Madoff trustee sues JPMorgan for $6.4bn

The trustee trying to recover billions for the victims of Bernard Madoff yesterday sued JPMorgan for $6.4bn, claiming it was 'wilfully blind' to the giant fraud.

Trustee Irving Picard alleges the bank continued to collect fees and profits and ignored well-documented suspicions about Madoff, the Guardian reports.

Picard hopes to recover at least $1bn in fees and profits and $5.4bn in damages, which would then be distributed to Madoff's victims.

"JPMorgan was wilfully blind to the fraud, even after learning about numerous red flags surrounding Madoff," David Sheehan of Baker & Hostetler, legal counsel for the trustee, says.

While many financial institutions were involved, Sheehan says JPMorgan was "at the very centre of that fraud, and thoroughly complicit in it".

He says JPMorgan was primary banker to Bernard L Madoff Investment Securities (BLMIS) for more than 20 years.

"Madoff would not have been able to commit this massive Ponzi scheme without this bank," Sheehan added. "JPMorgan should pay the price for its central role in enabling Madoff's fraud."

JPMorgan says it will vigorously defend itself and believes the suit "distorted the facts".