JP Morgan Chase ignored or dismissed warning signs about the Bernie Madoff fraud even as it earned hundreds of millions of dollars from its relationship with his firm, according to a lawsuit unsealed on Thursday.

The $6.4bn lawsuit, filed in federal bankruptcy court, claims that bankers at JP Morgan discussed the possibility that Bernard Madoff was operating a Ponzi scheme, worried that a firm of such size was audited by a storefront accountant and called his returns "too good to be true."