HSBC Sued for $9 Billion by Madoff Trustee Over Claims Lender Aided Fraud
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Irving H. Picard, trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, sued HSBC and a dozen feeder funds in U.S. Bankruptcy Court in Manhattan, Picard said in a statement. The claim is the latest by Picard, who faces a Dec. 11 deadline for suits claiming money from parties alleged to have profited from Madoff’s fraud.
The suit alleges the bank was aware of concerns that Madoff’s investment business was fraudulent and didn’t take steps to protect investors, according to the statement.
“Had HSBC and the defendants reacted appropriately to such warnings and other obvious badges of fraud outlined in the complaint, the Madoff Ponzi scheme would have collapsed years, billions of dollars and countless victims sooner,” Picard said in the statement.
HSBC said in a statement that Picard’s allegations are “unfounded” and that it will defend itself against them in court.
Picard filed a $7.2 billion claim against investor Jeffry Picower in May 2009. Picower died later that year. Last week, Picard sued JPMorgan Chase & Co. for $6.4 billion over claims the bank aided and abetted Madoff’s fraud.
On Nov. 23, Picard sued UBS AG for at least $2 billion, claiming the Swiss wealth-management firm also helped Madoff in his fraud. UBS and JPMorgan Chase said they bear no responsibility for Madoff’s crimes.
Picard has filed other claims seeking the return of $15.5 billion paid to Madoff friends and family, feeder funds and some investors. In addition, he’s sued hundreds of so-called “net- winner” investors -- those who withdrew more money from their Madoff accounts than they invested.
Picard, who has recovered $1.5 billion for Madoff creditors, has said that any money received in judgments or settlements in the suits will be returned to creditors on a pro rata basis.
Madoff, 72, is serving a 150-year sentence in a North Carolina federal prison after admitting he directed the biggest Ponzi scheme in history.
At the time of his arrest, Madoff’s account statements reflected 4,900 accounts with $65 billion in nonexistent balances. Investors lost about $20 billion in principal.
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