| NEW YORK, April 26
NEW YORK, April 26 JPMorgan Chase & Co
is not liable to a group of former customers of Bernard Madoff
who blamed the bank for being actively involved in his Ponzi
scheme and ignoring red flags of fraud, a federal appeals court
ruled on Wednesday.
The 2nd U.S. Circuit Court of Appeals in Manhattan said the
customers failed to show that JPMorgan had enough "control" over
Madoff's fraud to justify liability under federal securities
JPMorgan had been sued by roughly 2,500 so-called "net
winners" who withdrew more money from their accounts at Bernard
L. Madoff Investment Securities LLC than they invested.
Lance Gotthoffer, a lawyer for the customers, said his
clients will review their legal options.
Wednesday's decision upheld a May 2016 ruling by U.S.
District Judge John Koeltl in Manhattan.
Koeltel said the allegations suggested that JPMorgan was at
most negligent in dealing with Madoff, once a major client.
Many net winners believe their claims were undervalued in
the liquidation of Madoff's firm, and sued other individuals and
companies that dealt with the swindler.
Madoff has served roughly eight years of a 150-year prison
term. He turns 79 on Saturday.
JPMorgan agreed in 2014 to pay $2.6 billion to settle other
Madoff litigation, and in a settlement with the U.S. government
acknowledged responsibility for failing to stop Madoff.
The case is Friedman et al v. JPMorgan Chase & Co et al, 2nd
U.S. Circuit Court of Appeals, No. 16-1913.
(Reporting by Jonathan Stempel in New York; Editing by Bernard