Insiders

U.S. judge OKs JPMorgan $218 million Madoff class-action settlement

March 21, 2014 at 03:35 pm EDT

MarketScreener.com By The editorial team

U.S. judge OKs JPMorgan $218 million Madoff class-action settlement

NEW YORK (Reuters) - A federal judge on Friday gave final approval to JPMorgan Chase & Co's $218 million (132.1 million pounds) settlement to resolve class-action litigation accusing the largest U.S. bank of playing a central role in the huge Ponzi scheme of former client Bernard Madoff.

U.S. District Judge Colleen McMahon in Manhattan said the accord "easily meets the standards" for final approval, and provides "substantial and immediate" benefits to the swindler's former customers.

She also awarded $18 million of fees to law firms that represented the customers: Entwistle & Cappucci, and Hagens Berman Sobol Shapiro.

The settlement was part of a $2.24 billion global resolution of Madoff-related matters by JPMorgan, which was Madoff's main bank for more than 20 years.

JPMorgan also agreed to pay $1.7 billion to settle civil claims by the U.S. government, and $325 million to settle claims by Irving Picard, the trustee liquidating Madoff's firm.

Picard has estimated that Madoff customers lost $17.3 billion of principal. Madoff is serving a 150-year prison term.

The cases are Hill et al v. JPMorgan Chase & Co, U.S. District Court, Southern District of New York, No. 11-07961; and Shapiro et al v. JPMorgan Chase & Co et al, U.S. District Court, Southern District of New York, No. 11-08331.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)

Stocks mentioned in the article

	Add to a list Add to a list 0 selected To use this feature you must be a member Log in Sign up	Price	Change	5d. change	Capi.
	JPMORGAN CHASE	90.65 USD	-1.56%	-1.67%	555B

Bernard L. Madoff

Born into a Jewish family, he gave up his studies in order to start his career as lifeguard on the beaches of Long Island. Bernard Madoff founded in 1960, at 22 years old, his own investment company, called Bernard L. Madoff Investment Securities LLC, with only 5 000 dollars (won thanks to his job as lifeguard but also as installer of fire protections systems.

Bernard L.Madoff Investment Securities LLC becomes one of principal investment firm in Wall Street. His two sons, Mark (44 years old) and Andrew (42 years old) and his brother work with him.

Bernard Madoff is very active in the National Association of securities Dealers (NASD), a self-regulatory organization specialized in stock-market. His company is one of the five most active companies in the development of Nasdaq and Bernard Madoff was for a time chairman of the board. This “self made man” has a reputation so prestigious and he is considered as a ma major innovator in the world of electronic finance.

During his career as a fund manager, he is famous for his gift to get yields from 8 to 12 % per year regardless of market trends. However the fund accrues enormous losses so Bernard Madoff creates a system pyramid-shaped of sales where he pays the interests of first investors with the capital providing by the last investors.

Following the fall of financial markets at the end of 2008, some investors wishing to recover their funds make the system collapse. The Securities and Exchange Commission (SEC), the U.S stock market regulator, announces that the group of assets are fictitious and the fraud amounts around $ 50 billion, making it the biggest fraud performed by only one man.

In December 2008, Bernard Madoff is arrested by the FBI. His clients were banks, funds and big fortunes (Steven Spielberg). Among his investors, there are several French banks as Natixis, Société Générale.

View full profile