Madoff's banker, JP Morgan, nets $500M
Posted
Aug 31 2009, 04:08 PM
by
James Dlugosch
Rating:
Is this true? JP Morgan netted nearly $500 million in fees for doing business with the crooked Bernie Madoff?
That's the total, according to a recent University of Louisiana study. Apparently, the venerable bank turned a blind eye to Madoff's shenanigans in order to make an extra buck or two.
That makes JP Morgan the equivalent of a mob banker. We don't know what JPM knew and when it knew it, of course, but Madoff's victims will no doubt want to ask. I imagine the lawyers are lining up already.
Bing: More on the Bernie Madoff scandal
What exactly is the fiduciary responsibility of a bank or corporation? At a minimum, one would expect that any institution strives to do business morally and ethically. They certainly expect as much from their workers.
While it may not have been the job of JP Morgan (JPM) to uncover the fraud perpetrated by Madoff, asking a a few basic questions about his business might have been in order.
Or, were the questions asked but the answers ignored and any concerns brushed aside? No, that would be totally inappropriate.
Certainly, many Madoff vendors benefited from doing business with a perp. We know that Madoff's accountant was arrested as part of the scheme. What are the potential consequences for JPM?
I doubt a prosecution -- we certainly don't know enough right now to know a crime has been committed. That said, the bank will likely be punished by lawsuits seeking recovery and/or damages for Madoff's victims.
If it makes corporations think twice about who they do business with, bring on the lawyers.
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