Business

Picard: Make banks pay

A lawyer for the trustee seeking money for Bernard Madoff’s victims asked an appeals court yesterday to restore nearly $30 billion in claims against JPMorgan Chase and other banks, saying it would force those who furthered the fraud to “pay their fair share.”

The trustee’s lawyer sought to overturn lower court rulings that only Madoff victims themselves — not the trustee — could sue third parties such as banks for damages.

Irving Picard, the trustee, has said JPMorgan, Madoff’s main bank for two decades, and other banks ignored numerous warning signs about Madoff’s business — allegations the banks have denied.

Oren Warshavsky, a lawyer for Picard, told the appeals court that federal law empowers Picard to pursue claims on behalf of Madoff customers. He said the banks’ failure to detect that the money manager was running a Ponzi scheme exacerbated the victims’ losses.

“Anybody who suffered by virtue of this fraud, their suffering was increased each time it was extended,” Warshavsky said. “Those that helped propagate it should pay their fair share.”

Lawyers for the banks said only the victims of a purported fraud themselves can pursue fraud claims.

US District Judge Colleen McMahon in Manhattan last November tossed all but $425 million of Picard’s $19.9 billion lawsuit against JPMorgan.

Her decision followed a similar ruling in July 2011 from US District Judge Jed Rakoff, who dismissed $8.6 billion of Picard’s claims against HSBC Holdings and the Italian bank UniCredit.

Picard has recovered more than $9.2 billion for former Madoff customers.