UBS sued for $2bn by Bernie Madoff trustee

25 November 2010

The trustee recovering capital on behalf of fraudster Bernie Madoff’s investors is launching legal action against Swiss bank UBS to claim $2 billion.

UBS is accused of 23 counts of misconduct and fraud for its alleged collaboration in Madoff’s Ponzi scheme, according to the filing from Picard.

The Swiss bank is alleged to have acted as a sponsor and administrator of various ‘feeder’ funds including Luxalpha SICAV and Groupement Financier.

UBS is thought to have disregarded any signs of fraud while Madoff was also made the subcustodian of the assets belonging to the funds.

David J Sheehan, counsel for the Trustee and a partner at Baker & Hostetler LLP, working on behalf of Picard, said: “Madoff’s scheme could not have been accomplished unless UBS had agreed not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did.

“Without UBS’s serving as promoter, custodian, manager and administrator for the Feeder Funds, BLMIS would have been deprived of more than a billion dollars in investments, and Madoff’s fraud would have been diminished in both scope and duration.”

UBS has not yet commented on the filing.

Madoff was charged for fraud in his role in the Ponzi scheme and is currently serving a 150 year-old sentence.

By Jim Ottewill

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