Four months after Bernard Madoff admitted to defrauding thousands of investors of an amount that, including non-existent profits, could total as much as USD65bn, the ripples of the scandal
Four months after Bernard Madoff admitted to defrauding thousands of investors of an amount that, including non-existent profits, could total as much as USD65bn, the ripples of the scandal continue to reverberate across the global financial services industry.
New York-based hedge fund D.E. Shaw is reported to have decided against bidding for Madoff Securities, the group’s broker-dealer business, having previously been considered one of the favourites. According to CNBC, there are now three bids on the table, one as low as USD15m – a world away from the USD1bn at which the business was once valued by Madoff himself.
Meanwhile, JPMorgan Chase has been accused by Florida investors of entering into a conspiracy with Madoff to conceal the truth about his Ponzi scheme after discovering that the investment returns he reported were false. MLSMK Investments, a Palm Beach-based partnership, claims that JPMorgan’s actions violated federal racketeering laws.
‘Rather than protect other victims of Madoff’s fraud as it had already protected itself, Chase chose not only to protect Madoff but to partner with him in the fleecing of his victims by providing exactly the same range of services, for substantial fees, after learning of his criminal enterprise,’ MLSMK said in its complaint.
As more legal actions start reaching the courtroom, JPMorgan is unlikely to be the only blue-chip financial business in the firing line as defrauded investors look round for potential defendants with the deepest pockets.
