WASHINGTON Jan 13 The U.S. Supreme Court on
Monday asked the administration of President Barack Obama to
weigh in on whether the trustee seeking money for the victims of
convicted Ponzi-schemer Bernard Madoff can recover damages from
banks he accused of aiding in the fraud.
The court invited Solicitor General Donald Verrilli to file
a brief offering his views on whether a lower-court ruling that
prevented trustee Irving Picard from recovering nearly $30
billion from various banks, including JPMorgan Chase & Co
and HSBC Holdings Plc, should remain intact.
Picard last week announced a $325 million settlement with
JPMorgan, meaning the bank will be dropped from the case.
That settlement, which must be approved by a judge, was
announced just after JPMorgan struck a deal with U.S.
prosecutors and bank regulators to pay more than $2 billion to
resolve charges that it failed to follow up on suspicious
activity by Madoff, who was a client of the bank for more than
The other banks involved in the case are Italy's UniCredit
SpA and Switzerland's UBS AG.
There are separate claims against the banks in a class
action case that is not related to the issue before the Supreme
In June, the 2nd U.S. Circuit Court of Appeals said Picard
lacked standing to pursue a variety of claims on behalf of
former Madoff customers.
Picard has estimated that Madoff's Ponzi scheme cost
investors $17.3 billion of principal. Madoff pleaded guilty in
2009 and is serving a 150-year prison sentence.
As a result of the latest settlement, Picard has recovered
almost $10 billion, according to his statement last week.
The Supreme Court will take no action on the pending case
until the administration files its brief.
The case is Picard v. JPMorgan, U.S. Supreme Court, 13-448.