JPMorgan Chase had doubts about the legitamcy of Bernard Madoff’s business more than a year before his arrest, but did nothing, The New York Times reports. According to bank documents unveiled in a lawsuit, a risk management officer at Chase emailed a colleague to say that another bank executive “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a ponzi scheme.” That was on June 15, 2007. Even earlier, in 2006, a risk analyst told his superiors Madoff’s funds were behaving suspiciously, but the warnings of the risk analysts were ignored by a group of senior bankers making profitable deals with Madoff. The lawsuit alleges that Chase hid its doubts about Madoff, and that the scheme never would have worked without the bank’s cooperation. JPMorgan says the case is based on distortions.
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