Senior execs at JP Morgan Chase were warned about the legitimacy of Bernard Madoff’s investments, a lawsuit filed by the trustee acting for victims of the convicted Ponzi schemer alleges.

In the 114-page lawsuit, unsealed this week, Madoff trustee Irving Picard alleges that JP Morgan knew or should have known that Madoff was likely engaging in fraud.

"As we allege in the complaint, JPMC had a palpable concern that Madoff was a fraud for years, but it was not until October 2008 that it reported Madoff to government officials,” according to a statement issued by Picard.

The bank filed a suspicious-activity report to the UK's Serious Organised Crime Agency in October 2008, two months before the fraud was exposed, according to the suit.

“Contrary to the trustee's allegations, JP Morgan did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff,” JP Morgan said in a statement.

“At all times, JP Morgan complied fully with all laws and regulations governing bank accounts, including the regulations invoked by the trustee… JP Morgan intends to defend itself vigorously against the unfounded claims brought by the trustee."

The lawsuit, which describes JP Morgan as Bernard L Madoff Investment Securities’ primary banker for more than two decades, alleges “the bank appears to have been concerned only with protecting its own investments in BLMIS feeder funds.”

The complaint seeks to recover almost $1 billion in fees and profits and $5.4 billion in damages. It is one of hundreds Picard has filed to recover assets for the victims of the Ponzi scheme.