Jp Morgan Chase Bank V. Madoff Case

1438 Words3 Pages
bulb-icon

Recommended: Madoff’s Ponzi essay

Introduction Bernard L. Madoff was the perpetrator of a Ponzi scheme, and he was finally arrested in December 2008. MLSMK Investment Company (MLSMK) is a Florida partnership, which invested $12.8 million in Madoff's investment company between October and December 2008. On April 23, 2009, MLSMK filed a complaint in the District Court asserting five claims against JP Morgan Chase & Co. (JPMC) and JP Morgan Chase Bank (Chase Bank). They were accused of conspiring with Madoff to trick the victims. Facts Bernard L. Madoff Investment Securities (BMIS) provided market-making services, investment-advisory services, and proprietary trading for clients. Madoff encouraged their clients to invest in its investment-advisory entity, promising the investors they would earn returns up to 10-12% a year. However, Madoff used later-invested money from the investment-advisory entity to pay the returns which he promised to other investors. On December 11, 2008, Madoff was …show more content…

v. One Groupe Int'l Inc. The plaintiffs in this case alleged that the defendant’s aiding and abetting of another's securities law violations, so the plaintiffs asserted a RICO claim. The defendant moved to dismiss the RICO claim. Then, the district court interpreted that the RICO Amendment will only bar RICO claims that the plaintiffs could pursue as securities claims against the named defendant with predicate acts of securities fraud. In addition, there is another relevant question under PSLRA was pointed out in the OSRecovery case that whether the alleged conduct of specific defendant is actionable or not under the securities laws. Due to the reason that under Section 10(b) of the Securities Exchange Act, "there is no private right of action for aiding and abetting”. And the plaintiffs could not pursue to prove their rights by filing a securities claim. The court concluded that the RICO Amendment does not bar the plaintiff’ RICO

Show More
Related

  • Mrs. Jennifer Sharkey V. P. Morgan Chase Case Study

    1121 Words  | 3 Pages

    This case is based on Mrs. Jennifer Sharkey, who sued J.P. Morgan & Co. (JCMC), Mr. Kenny, Mr. Green, and Mrs. Lassiter, alleging breach of contract and violations of the SOX anti-retaliation statute. The facts started when Mrs. Sharkey was assigned to a Suspect Client 's account where members of JPMC expressed to her their concern regarding to this account because they suspected that the Suspect Client was involved in illegal activities. After Mrs. Sharkey’s investigation, she claimed that she informed her conclusions to superiors Mr. Kenny, Mr. Green, and Mrs. Lassiter, of the Suspect Client 's potential unlawful activities, such as: money laundering, mail fraud, bank engaged in fraud, and violations of federal securities laws. After

    Read More

  • Madoff's Case: The Madoff Ponzi Scheme In The World

    857 Words  | 2 Pages

    After 8 years the SEC finally found the scheme controlled by Madoff. In December 2008 Madoff was found guilty; however, stayed under house arrest by the until his trial in March of 2009. He was not arrested because of the 10-million-dollar payment which allowed him to stay under home surveillance until the trial. While at home, he and his wife, mailed valuables such as jewels and jewelry to family members. In March of 2009, Bernard Madoff was finally found guilty and was sentenced to 150 years in prison. On the day of his arrest, the FBI found 100 checks that totaled $173 million dollars that were made to friends, family, and

    Read More

  • Meritor Savings Bank V. Vinson

    710 Words  | 2 Pages

    The case Meritor Savings Bank V. Vinson is a landmark case for employee's rights in the 20th century and beyond. This case centered on a sexual harassment claim from Mechelle Vinson against her former employer and boss. Vinson's claim was that she was sexual harassed and was forcibly coerced into sexual acts with Sidney Taylor, her manager, while working for Meritor Savings Bank. The results of this case, helped establish what Title VII of the Civil Rights Act of 1964 is today.

    Read More

  • Jacobson V. United States

    341 Words  | 1 Pages

    FACTS= On September 24, 1987, Keith Jacobson was indicted on charges of violating a provision of the Child Protection Act of 1984, which criminalizes the knowing receipt through mail of a “visual depiction [that] involves the use of minors engaging in sexually explicit conduct.” On Feb 1984 Jacobson ordered two magazines in the mail of young boys. The magazines entitled Bare Boys 1 and Bare Boys 2, contained material of nude young boys from preteen to teens. Jacobson claimed that he want to order material of 18 year olds and up. However Jacobson’s receipt of the magazines was legal under both federal and Nebraska laws. Laws were constructed three months after the order was filled that banned all sexual depictions of children. Soon after the Gov. started setting up Jacobson by sending him applications to phony organizations that were illegally based.

    Read More

  • The Legacy of JP Morgan

    3002 Words  | 7 Pages

    In 1871, the banking house of Drexel, Morgan & Co. was established by John Pierpont Morgan. "Twenty four years later it was renamed J.P. Morgan & Co., which it was to remain until the firm's purchase by Chase Manhattan in 2000. (Hughes 23) At this point, Chase Manhattan was the largest banking company in the United States. This was a far cry from the 1980's when Morgan "boasted the largest market capitalization of any American bank and was more expensive to buy than Citicorp. (Hughes 11)" While J.P. Morgan could not imagine the path banking would take in the U.S. with his passing in 1913; his banking house would have a strong hold on American banking for much of the 20th century. The introduction of bank holding companies and certain laws placing restrictions on American banking such as the Glass Steagall Act of 1934 brought about many changes in American banking and allowed for the emergence of international banks to supplant the "House of Morgan" in the new era. It is no question though, that "John Pierpont Morgan was one of the most influential figures in the rise of U.S.

    Read More

  • Enron Case

    851 Words  | 2 Pages

    Enron corporation, a company establisted at 1985, in Taxes. Until 2001, it becames one of the biggest company in the world, which service for energy, natural gas and telecommunications. In 2000, the disclosure turnover reached $101 billion. Everything is going well for Enron corporation. However, at beginning of 2001, Jim - a good reputation of the short-term investment agency owner. Publicly on Enron’s profit model expressed doubts. He pointed out that alough Enron’s business looks very brilliant, but in fact they cannot really make the amount of moeny like the data shown before. No one can say they can understand how Enron is making moeny. According to the inverstment owner’s analysis, Enron’s profitability in 2000 to 5%, to the beginning

    Read More

  • Analysis Of Jpmorgan Chase, Bailouts, And Ethics

    601 Words  | 2 Pages

    Jake Clawson Ethical Communication Assignment 2/13/2014. JPMorgan Chase, Bailouts, and Ethics “Too big to fail” is a theory that suggests some financial institutions are so large and so powerful that their failure would be disastrous to the local and global economy, and therefore must be assisted by the government when struggles arise. Supporters of this idea argue that there are some institutions that are so important that they should be the recipients of beneficial financial and economic policies from government. On the other hand, opponents express that one of the main problems that may arise is moral hazard, where a firm that receives gains from these advantageous policies will seek to profit by it, purposely taking positions that are high-risk, high-return, because they are able to leverage these risks based on their given policy. Critics see the theory as counter-productive, and that banks and financial institutions should be left to fail if their risk management is not effective.

    Read More

  • The Bernie Madoff Ponzi Scheme

    2602 Words  | 6 Pages

    The Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.

    Read More

  • Bernie Madoff

    966 Words  | 2 Pages

    After having them signed as investors to his company, he would pay them very handsome returns and in gaining their trust, they would give him extremely positive feedback, which would eventually attract more investors. In addition, Madoff would capitalize on his business having this foresight of exclusivity. His promise to investors of a 10percent return annually was never openly questioned until 2001 and 2005. Articles and magazines were written, and the person in question was none other than Madoff himself. The SEC would request reports throughout the life cycle of his operation, but Madoff would escape their radar by instructing his employees to construct false trading records and monthly investor statements. Moreover, Madoff would also gain money from fees on investors through feeder funds, which are funds that combined money from other investors and were then transferred to a Madoff Securities account. Another reason Madoff escaped from the SEC is through his family. At some point in time, SEC boss Christopher Cox ran an internal investigation and found out that one of his own employees from the SEC, Eric Swanson, was in charge of monitoring Msdoff’s firm, who also happened to be married to Madoff’s niece. The last reason Madoff managed to hide his Ponzi scheme so well was due to his veteran

    Read More

  • The Bernard Madoff Investment Scandal

    2631 Words  | 6 Pages

    Bernard Madoff had full control of the organizational leadership of Bernard Madoff Investments Securities LLC. Madoff used charisma to convince his friends, members of elite groups, and his employees to believe in him. He tricked his clients into believing that they were investing in something special. He would often turn potential investors down, which helped Bernard in targeting the investors with more money to invest. Bernard Madoff created a system which promised high returns in the short term and was nothing but the Ponzi scheme. The system’s idea relied on funds from the new investors to pay misrepresented and extremely high returns to existing investors. He was doing this for years; convincing wealthy individuals and charities to invest billions of dollars into his hedge fund. And they did so because of the extremely high returns, which were promised by Madoff’s firm. If anyone would have looked deeply into the structure of his firm, it would have definitely shown that something is wrong. This is because nobody can make such big money in the market, especially if no one else could at the time. How could one person, Madoff, hold all of his clients’ assets, price them, and manage them? It is clearly a conflict of interest. His company was showing high profits year after year; despite most of the companies in the market having losses. In fact, Bernard Madoff’s case is absolutely stunning when you consider the range and number of investors who got caught up in it.

    Read More

  • Deutsche Bank Case

    945 Words  | 2 Pages

    This short report aims to give a brief overview of Deutsche Bank’s alarming situation and describe the sharp decrease of its profitability. It will briefly introduce the context of this crisis and aim to explain it through an analysis of one of the most used indicators of performance for banks, the return on equity (ROE).

    Read More

  • Essay On Bernie Madoff

    605 Words  | 2 Pages

    Bernie Madoff is one of the greatest conman in history. The Bernie Madoff scandal takes the gold as one of the top ponzi scheme in America. Madoff started the Wall Street firm, Bernard L. Madoff Investment Securities LLC, in 1960. Starting off as a penny stock trader with five thousand dollars, earned from his workings as a lifeguard and sprinkler installer, his firm began to grow with the support of his father-in-law, Saul Alpern, who helped by referred a group of close friends and family. Originally, his firm made markets by the National Quotations Bureau’s Pink Sheets. However, in order to compete with the bigger firms that were trading on the New York Stock Exchange floor, his firm started to use very intelligent computer software that help distributed their quotes in second’s rater then minutes. This software later became the NASDAQ that we know today. In December of 2008 Bernard Madoff confessed that he had embezzling billions of dollars from investors. It is estimated to have lasted nearly two decades, and stolen approximately $64.8 billion. On December 11, 2008 he was arreste...

    Read More

  • RICO Act Essay

    2492 Words  | 5 Pages

    The government has since used the RICO act for its intended purposes over the years. The original intent was to bring down members of criminal organizations such as the mafia. It allowed the prosecution to connect incidents to the bosses or leaders behind the original crimes. Throughout our research we went back to how the RICO act came to be and the definitions of some key terminology of the act. The government has been successful in many famous cases over the years by benefiting from the RICO act. The RICO act has also led to some failures and confusion both in civil cases and in prosecution cases. The Hell’s Angels is a great example of the jury not understanding the terminology of an organized crime enterprise. The jury was unable to determine whether or not the prosecution was finding the bikers guilty or the Hell’s Angels enterprise guilty leading to a hung jury. Since, the original act has passed its original purpose the government and civil cases have abused the RICO act beyond it’s intended purposes. What was once a tool in law to aid in the dismantling of criminal organizations has now become an intimidating force which could prevent growth in an industry for fear of the massive fines. Through our research on the subject of Racketeer Influenced and Corrupt Organization Act we have found the good, the bad, and the grey area. RICO has served its purpose, but like with any good intentioned act it can be mistreated over

    Read More

  • Lack of Ethical Behavior in the Cases of Bernie Madoff and Enron

    669 Words  | 2 Pages

    Bernie Madoff, “a former American stock broker, investment advisor, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in the history of the world”. (Bernard Madoff, 2011, para. 1) Bernie was able to convince investors to give him large sums of money with the promise that they would received between eight percent to twelve percent return a year. Bernie ran a pyramid scheme where Bernie kept the large sums of money for himself, and then he used the new investors funds to pay off the o...

    Read More

  • White Collar Crimes

    1413 Words  | 3 Pages

    Zero in on a 45 year-old mother of 13. A man comes to her with a proposal. Invest in his company, and he can guarantee 100%, 200%, possibly even 300% returns on what she gives in mere months. For her this means taking out a second mortgage on her house; the same house she hopes to pay off entirely with the promised large return on her investment. Two years later, the windows of the house are boarded up and the woman recounts to reporters the chilling details behind the reason her family has no place to spend Thanksgiving this year. Her money is gone, along with her hopes of ever retiring from the two jobs she works. Stories like this are heard all too often from victims of white-collar crime. “Lying, cheating, and stealing. That’s white-collar crime in a nutshell. The term- reportedly coined in 1939- is now synonymous with the full range of frauds committed by business and government professionals” (FBI, n.d.). White-collar criminals are not holding a gun to anyone’s back demanding wallets and valuables. Instead, they gain the trust of those they prey on. Worse, they use their status in society to build comfort in their victims’ minds. A few of the best-known schemes in U.S. history are Enron, WorldCom, and the massive Bernie Madoff Ponzi scheme. These three cases alone amount to losses upwards of 70 billion dollars. The victims in each case are the same, American citizens. White-collar crime in America is insufficiently controlled due to weak laws, a broad pool of victims, and the enormous power scale of those involved.

    Read More

More about Jp Morgan Chase Bank V. Madoff Case

Open Document