First, the NY Mets are being sued for about $1 billion in a clawback suit by the trustee in the Madoff case, Irving Picard. About $300 million of the $1 billion is for what we normally think of as a clawback. That is, the Mets took out $300 million over and above the principal they invested with Madoff. Fair enough. However, I may be simplifying things a bit but it sounds like the additional $700 million is being claimed as compensation as the Mets owner, Mr. Wilpon, is being considered an accomplice in Madoff's fraud. If Picard can collect this amount for Madoff's victims, it will be unprecedented. Here is a quote from a NY Times article on the matter:
As for JP Morgan Chase (hereafter, JPMC), Mr. Picard is suing them because they have allegedly found some pretty clear signals that JPMC knew or should have known Madoff's funds were bogus. Here are some quotes from another NY Times article:Now, however, a lawsuit against Mr. Wilpon and Mr. Katz brought by the trustee for victims of Mr. Madoff has suggested the relationship — financially and personally — was deeper than anyone might have suspected. The trustee, Irving H. Picard, has alleged that the two men’s dealings with Mr. Madoff were extensive and longstanding, and that they went on even after suspicions about Mr. Madoff’s operation were raised, according to two lawyers involved in the case.As a result, according to the lawyers, Mr. Picard has asserted that Mr. Wilpon and Mr. Katz either knew or should have known that Mr. Madoff’s operation was a potential fraud. Mr. Wilpon, Mr. Katz and their lawyers have refused to comment on the lawsuit, which was filed under seal in December in federal bankruptcy court in Manhattan.
Mr. Picard appears to be thorough in his efforts to collect money for Madoff's victims. I would also like to see the criminal investigation turn up some more information about others who were involved in this. It would be a shame in my mind if this massive fraud only results in only a few criminal convictions. I find it hard to believe that Bernie did not have many accomplices. The rest of his partners in crime need to serve time too...On June 15, 2007, an evidently high-level risk management officer for Chase’s investment bank sent a lunchtime e-mail to colleagues to report that another bank executive “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme.”Even before that, a top private banking executive had been consistently steering clients away from investments linked to Mr. Madoff because his “Oz-like signals” were “too difficult to ignore.” And the first Chase risk analyst to look at a Madoff feeder fund, in February 2006, reported to his superiors that its returns did not make sense because it did far better than the securities that were supposedly in its portfolio.Despite those suspicions and many more, the bank allowed Mr. Madoff to move billions of dollars of investors’ cash in and out of his Chase bank accounts right until the day of his arrest in December 2008 — although by then, the bank had withdrawn all but $35 million of the $276 million it had invested in Madoff-linked hedge funds, according to the litigation.