JP Morgan was Bernie Madoff's main bank - a temporary, and once highly-profitable, association which began in the 1980s and lasted right up to Madoff's demise.
The following news probably wasn't noticed in the offices of prominent Utah 'Mormons' who have conspired with various 'MLM income opportunity' racketeers, to commit fraud and obstruct justice, but it should certainly have rung alarm bells in the boardrooms of the financial institutions which facilitated the capitalization of the 'Herbalife' and 'NuSkin' rackets on Wall St.
Last week, JP Morgan Chase agreed to settle all outstanding claims (government and private) connected to its own participation in Bernie Madoff's crimes.
In brief, it is now a matter of public record that economic alchemist, Bernie Madoff, used JP Morgan Bank to launder almost all of the billions of dollars he stole by steadfastly pretending that he was running a lawful investment scheme - the 'world's largest hedge fund.'
In reality, all the apparently profitable stock market trades which Madoff kept telling the world he was making, never actually took place, but the greedy little monkeys at JP Morgan who handled Madoff's accounts and who, therefore, must have seen with their own eyes, and heard with their own ears, that Madoff wasn't actually buying, or selling, the mountains of stock which he claimed, never once approached the authorities to say that there was something radically wrong.
It seems that almost everyone on Wall St. knew that Madoff was a world-class liar and a crook, but people who live in glass mansions, don't throw stones.
Readers will recall that Mr. Madoff is currently serving a 150 year prison sentence after being convicted of instigating, and dissimulating, one of the most-outrageous Ponzi schemes of all time.
Mysteriously, even though every move Madoff followed (over a period of several decades) obviously formed part of an overall pattern of major racketeering activity (comprising literally thousands of counts of fraud, money laundering, obstruction of justice, etc.), neither he nor any of the troop of wise monkeys who enabled him to perpetrate and hide his catalogue of crimes, was charged under the US federal Racketeer Influenced and Corrupt Organizations Act.
JP Morgan was merely accused (as a corporate structure) of not reporting any concerns about (what turned out to be) a sociopath, criminal client, Bernard Madoff.
Without accepting any fault, JP Morgan Chase has apparently been absolved of all further liability, after promising that, henceforth, its own staff will not to be so deaf, dumb and blind, when it is obviously being used to facilitate fraud, and agreeing to pay $2.6 billions to settle all outstanding claims (government and private) connected to the bank's previous participation in thousands of Bernie Madoff's crimes.
David Brear (copyright 2014)
'Almost everyone on Wall St. knew what was going on.' Good analysis.
ReplyDeleteWhen Markopolis blew the whistle on Madoff, no one at the SEC listened. I knew years back so did everyone I worked with, but that's how it was. Madoff was a very powerful man.
There were plenty on the St. and in regulation who could have stopped Madoff years before his Ponzi got to mega size. Look at all the big players who avoided Madoff's fund. This is the proof.
Anonymous - Thanks for your approval, but when you say that you knew that Madoff was a crook and that everyone you worked with also knew, where exactly were you working?
DeletePresumeably, you were on Wall St.?
Mr; Brear the settlement says
DeleteA private client affiliated with a bank that JP Morgan later absorbed asked his bank to replicate how Madoff generated a reported 830% return on his investments, from $183m to $1.7bn over 12 years. They could not.
Chase Alternative Asset Management - a JP Morgan "fund of funds" open to investors - considered including Madoff's fund. A fund manager commented in 1998 that the returns were "possibly too good to be true".
In August 2007, a trader on the Equity Exotics desk tried to replicate the returns reported by a Madoff fund tied to S&P 500 performance during the period. He wrote the stock market performance was "far away" from the returns Madoff "allegedly made".
In March 2009 - three months after Madoff's arrest - a banker at JP Morgan formerly in charge of Madoff's account received a form letter from JP Morgan's compliance department. It asked him to certify that the client relationship complied with "all legal and regulatory-based policies".
Anonymous -
Delete'Possibly too good to be true?'
Why should anyone who claims to have discovered a secret formula for 'multiplying money,' want to share his 'secret' with other people, unless the 'secret' was part of a Ponzi scheme?
If you ignore all this thought-stoppng Wall St./regulatory bull-shit, it seems quite clear that Madoff's banker (i.e. the person previously in charge of Madoff's fairytale accounts at JP Morgan) must have known that Madoff was not making all the 'profitable trades' he claimed. It also seems quite clear that, by handing over all this cash in settlement of outstanding claims, JP Morgan Chase has convinced the regulators that 'Madoff's banker was in compliance with the banks own legal and regulatory policies' when he withheld key-information about madoff's crimes from JP Morgan's own Compliance Dept.
Thus, the idea that all these high-powered traders affiliated to JP Morgan, were, at the same time, busy attempting to reverse-engineer Madoff's non-existent, spectacular 'investment returns,' is bordering on the absurd.
When JP Morgan's compliance Dept. finally contacted Madoff's former banker (3 months after Madoff had been arrested), instead of asking him to 'certify' that his 'relationship with Madoff complied with all legal and regulatory-based policies,' surely the compliance Dept. must have already known that Madoff's banker could never have seen any independent evidence that Madoff's scheme had ever had a significant source of revenue other than its victims.
In simple terms, unless he was a blithering idiot, Madoff's banker must have known that a monumental fraud was being perpetrated with the assistance of JP Morgan
So can you please explain to us, how can withholding key information about a fraud be described as 'complying with all legal and regulatory based policies,' unless these policies were themselves criminal.
'it seems quite clear that Madoff's banker (i.e. the person previously in charge of Madoff's fairytale accounts at JP Morgan) must have known that Madoff was not making all the 'profitable trades' he claimed.'
DeleteThis is merely an opinion.
Anonymous - You can fool some of the people all of the time, and all of the people some of the time, but you can't fool all of the people all of the time (with the notable exception of the many attorneys at the SEC). So are you (or were you) an SEC attorney?
DeleteNormally, I wouldn't respond to such a foolish comment, but for you, I will make an exception.
Please try to follow.
In order to have made all his claimed 'profitable trades,' Madoff would have needed to transfer billions of dollars to and from his bank accounts, to pay, and be paid by, the brokers and traders with whom he pretended 'to be doing business.'
Self-evidently, the person who would have known that this mountain of bank-transactions had never happened, was Madoff's banker.
The banker would have seen that Madoff's accounts had billions of dollars being channelled through them, but these transactions only comprised payments to, and payments received from, madoff's clients and associates, and that he never bought and sold all the stock he claimed.
Why do you falsely describe this axiomatic statement as, 'merely an opinion?'
David Brear (copyright 2014)