JPMorgan (JPM), Citigroup (C), UBS (UBS) Fighting Madoff Trustee Over Disclosure

JPMorgan Chase & Co. (NYSE:JPM), sued for $6.4 billion by the trustee for Bernard L. Madoff’s firm, said the trustee has no right to “abrogate” a yearlong agreement to protect trade secrets by revising his rules for handling confidential information.

The trustee, Irving H. Picard, seeking $100 billion for investors in Madoff’s Ponzi scheme in lawsuits, has asked a judge for more freedom to use information demanded for his investigations. JPMorgan’s objection is one of at least eight filed yesterday by banks and investment managers including UBS AG (NYSE:UBS), Citigroup Inc. (NYSE:C) and HSBC Holdings Plc. (NYSE:HSB)

JPMorgan, based in New York, said it gave Picard documents 22 times in the past 15 months, relying on his agreement not to share the information with competitors or other parties.

“The proposed order would permit the trustee to disclose JPMorgan’s confidential and proprietary information to any party or its agent in any one of the more than one thousand adversary proceedings that have been commenced by the trustee,” the second-biggest U.S. bank said in a filing in U.S. Bankruptcy Court in New York. “The trustee is not entitled to abrogate confidentiality arrangements that have been relied upon by JPMorgan and other parties.”





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JPMorgan (JPM) Strong-Armed by MLB, Mets to Provide More Financing

The cash-strapped New York Mets and Major League Baseball are reportedly pressuring JPMorgan (NYSE:JPM) to come up with more financing for the baseball team as they continue to struggle from the consequences of the Bernie Madoff Ponzi scheme.

At this time, according to a report in the New York Post, the Mets are "desperately" seeking millions in financial assistance just for general operating expenses.

Being a major financier for Major League Baseball, they are again being sought for capital, as they successfully helped the team raise $430 million in 2010, which included Bank of America (BAC) and Citigroup (C) as lenders.

Citing an anonymous source, MLB and the Mets are said to be "exerting strong pressure" on JPMorgan to find them funds to tide them over.

At this time, the Post reported the Mets have debt of about $505 million, and are losing close to $50 million annually.

Citigroup (C) Also Gets Sued for $430 Million by Madoff Trustee

Irving Picard, the trustee in charge of recovering funds for investors in Bernie Madoff's Ponzi scheme sued Citigroup (NYSE:C) for $430 million for ignoring a possible fraud, according to court documents released Tuesday.

Picard sued Citi over fund transfers the bank performed in connection with a $300 million loan made to a large fund holding a BLMIS account, which was a "Madoff Feeder Fund." Citi's investment bank also made $130 million from swap transactions with another Madoff feeder fund, according to the document.

"Armed with public and considerable nonpublic information about Madoff, Citi knew or should have known of possible fraud at Madoff's investment advisory business," the trustee alleged.

Picard has also sued JPMorgan Chase (NYSE:JPM) for $6.4 billion for allegedly knowing that Madoff's business was fraudulent.

"Citi will vigorously defend against these claims by the Trustee as they are entirely without merit and completely false," said a Citigroup spokesman.

JPMorgan (NYSE:JPM) Goes on Offensive in Madoff Lawsuit

JPMorgan (NYSE:JPM) went on the attack today against court-appointed trustee Irving Picard, claiming he's attempting bypass the law in pursuing his $6.4 billion case against them over the Bernie Madoff debacle.

Their concerns center around Picard suing in bankruptcy court rather than having a jury trial, which JPMorgan says they have the right to.

JPMorgan said in a court filing, "The trustee's massive damages action against JPMorgan bears no resemblance to a typical lawsuit commenced by a bankruptcy trustee."

"In substance, the trustee is trying to pursue an enormous back-door class action."

The giant bank told presiding U.S. Bankruptcy Judge Burton Lifland that the case belongs in federal district court, citing the need for a "significant interpretation" of federal banking law, including the Bank Secrecy Act and USA Patriot Act, and whether or not Picard even has standing to sue, requiring an assessment of federal securities law.

JPMorgan said, "The trustee's claims raise fundamental questions, of great importance to the banking industry as a whole, as to whether banks such as JPMorgan have liability to private plaintiffs for fraud conducted by their customers. These issues fall outside the province of the bankruptcy court."

Filing on behalf of JPMorgan was John Savarese, a partner at Wachtell Lipton Rosen & Katz.

JPMorgan was trading at $45.20, down $0.54, or 1.18 percent, as of 11:29 AM EST.

JPMorgan (NYSE:JPM) Brand at Risk in Madoff-Related Lawsuit

Anything that could taint an individual or company with the reputation of Bernie Madoff could be devastating, and that's what JPMorgan Chase (NYSE:JPM) is facing now.

In a lawsuit filed by trustee, Irving Picard, JPMorgan is accused of seeking to generate revenue by offering products connected to Madoff even when they aired concerns over how legitimate the returns related to Madoff products were.

The lawsuit was announced back in the early part of December, but on Thursday the extent of the allegations of Picard against JPMorgan was revealed via an unsealed version of the suit.

According to Picard, JPMorgan ignored the doubts they had about Madoff offerings and went ahead with the investments anyway.

JPMorgan responded to the new revelations, saying, "J.P. Morgan did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff. Madoff's firm was not an important or significant customer in the context of J.P. Morgan's commercial banking business."

JPMorgan Chief Executive Officer, James Dimon, added that the lawsuit was "based on distortions of both the relevant facts and the governing law."

Picard is seeking $6.4 billion in damages in the complaint.

JPMorgan was trading at $44.65, falling $0.81, or 1.78 percent, as of 12:49 PM EST.

Madoff Trustee Sues BofA (NYSE:BAC), Citigroup (NYSE:C) for Over $1 Billion

Citigroup (NYSE:C) and Bank of America (NYSE:BAC) were among a group of banks sued for over $1 billion by Madoff trustee Irving Picard.

Other banks included in the litigation are Natixis SA, Fortis Prime Fund Solutions Bank (Ireland) Ltd., ABN Amro Bank NV, Nomura Bank International Plc. and Banco Bilbao Vizcaya Argentaria SA.

The banks being sued are alleged to have known, or should have known, that Madoff's investments were a fraud.

Citigroup is considered the most liable of the banks, and is being sued for $425 million, while Bank of America's alleged liability is a paltry $16 million in comparison.

Of those banks commenting, all of them said they had no idea of the shenanigans Madoff was involved in, and would vigorously defend against the lawsuit.

Picard, who is in charge of liquidating the remaining assets of Madoff's firm, said, "The complaints allege that the banks enabled the Madoff Ponzi scheme by opening a spigot of new money into the Madoff feeder fund network, by creating and offering derivative investment products linked to various Madoff feeder funds. Often, the derivative products were developed in conjunction with the Madoff feeder funds."

JP Morgan (NYSE:JPM) Sued Over Madoff for $6.4 Billion

JP Morgan (NYSE:JPM) has been sued in regard to the Bernie Madoff debacle, with trustee Irving Picard filing a $6.4 billion lawsuit against the giant financial institution.

They are accused of approving of and supporting Madoff in his fraud and played a central part in the situation.

According to Picard, JP Morgan continued to generate profits and collect fees from Madoff while they ignored the fraud he was engaged in. He also said documentation shows they at minimum were suspicious of the fraud being practiced by Madoff.

The lawsuit, which was filed in U.S. Bankruptcy Court in New York, is asking for $5.4 billion in damages to be paid to victims of Madoff, and another $1 billion for the profits and fees received by JP Morgan from Madoff.