Tuesday, 29 July 2014
Last updated 5 hours ago
Jun 7 2011 | 12:45pm ET
Some of the investors burned in Bernard Madoff’s Ponzi scheme have scored a $62.5 million settlement in a lawsuit against HSBC Holdings, which acted as his custodian.
The class-action suit was filed against several HSBC units and other defendants by investors in Ireland’s Thema International Fund. The fund’s assets had been invested with Bernard L. Madoff Securities.
In a statement quoted by Bloomberg, HSBC said the settlement “shall in no way be construed” as an admission of fault, adding that it had “good defenses” against Madoff-related suits it faces in Germany, Luxembourg and other countries.
According to a statement by the fund’s law firm, Chapin Fitzgerald Sullivan & Bottini, the Thema Fund was controlled by Bank Medici. Bank Medici and its founder, Sonja Kohn, are part of a $59 billion suit filed by the court-appointed trustee liquidating Madoff’s firm.
The bank has stated it knew nothing of Madoff’s fraud and lost $1 billion itself in Madoff feeder funds. But according to KPMG reports obtained by Bloomberg, auditors twice warned HSBC that investing client funds (as much as $8 billion) with Madoff left it open to “fraud and operational risks.”
The deal still needs court approval.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…