JPM risk officer 'was warned on Madoff'

A senior JPMorgan Chase risk officer was warned Bernard Madoff was suspected of running a Ponzi scheme nearly 18 months before the broker was charged with a $19.6bn fraud, according to a newly unsealed court filing.

The allegation is part of a $6.4bn lawsuit filed against the US bank by Irving Picard, the trustee charged with recovering money for Madoff's victims, the Financial Times reports. The lawsuit seeks to recover $1bn in fees and profits JPMorgan took as the primary banker to Madoff's business and by structuring Madoff-related derivatives, plus $5.4bn in damages. The 114-page complaint unsealed on Thursday was originally filed secretly at JPMorgan's request. It was one of nearly 60 lawsuits the trustee filed late last year seeking more than $40bn from dozens of banks, hedge funds and i...