Graphic of Madoff and his nesting doll-style frauds
© Unknown
Last week JPMorgan Chase paid $2.6 billion in fines and restitution, signed a deferred prosecution agreement and walked away from their 22-year involvement with Bernie Madoff's Ponzi scheme. But according to court documents filed in 2011 by the Trustee of the Madoff victims' fund, Irving Picard, this was not a simple case of poor risk management at JPMorgan. This was an operation structured like those Russian nesting dolls, with the Ponzi scheme as the outside doll with many more frauds layered inside the big one.

After reading the documents released by the Justice Department in connection with the settlement, the Los Angeles Times asked in a photo caption of a smirking Madoff outside of Federal Court: "Bernie Madoff: Was he part of the JPMorgan ring, or was JPMorgan part of his ring?"

The New York Times had a far more charitable stance, with Floyd Norris writing: "Did JPMorgan Chase deliberately cover up Bernard L. Madoff's fraud? The documents released this week by federal prosecutors do not show it did, and I suspect it did not."

Interestingly, the folks in sunny California, 2400 miles away from Wall Street, had an epiphanous moment in that photo caption while the Times assumed an all too common ostrich position when it comes to Wall Street.

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