JPMorgan Chase 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.
Reuters reports that 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 laws.
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.
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.
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