U.S. appeals court ruling revives whistleblower suit against JPMorgan

jueves 9 de octubre de 2014 12:01 GYT
 

By Joseph Ax

NEW YORK Oct 9 (Reuters) - A U.S. appeals court ruling on Thursday revived a lawsuit against JPMorgan Chase & Co filed by a former vice president claiming the bank ignored red flags about a client's potential fraud, even after the massive Ponzi scheme operated by Bernard Madoff, another JPMorgan client, was exposed.

The 2nd U.S. Circuit Court of Appeals reversed a lower court's decision to throw out Jennifer Sharkey's whistleblower suit and ordered the judge to consider whether the case should be allowed to continue under a more lenient standard of whistleblower protection.

The ruling from the three-judge panel was unanimous.

JPMorgan has rejected Sharkey's allegations and a bank spokesman declined to comment on Thursday.

Sharkey claims bank executives ignored concerns she began voicing in January 2009 about whether an Israeli client was engaging in fraud and money laundering, just weeks after Madoff's multibillion-dollar scheme became exposed.

Madoff was a client of JPMorgan for more than 20 years, sending deposits and transfers from his investors totaling about $150 billion through the bank.

In January, JPMorgan agreed to pay $2.6 billion to the U.S. government and Madoff victims to settle allegations it failed to alert authorities to its suspicions of fraud at Madoff's firm.

According to Sharkey's lawsuit, she told superiors that the client failed to provide documentation for various businesses and did business with Colombia despite the bank's ban on transactions with that country. The client is not named in court papers.   Continuación...