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Madoff trustee sues HSBC for $9bn Madoff trustee sues HSBC for $9bn
(about 4 hours later)
The trustee for the liquidation of Bernard Madoff's investment firm is suing HSBC for $9bn (£5.7bn).The trustee for the liquidation of Bernard Madoff's investment firm is suing HSBC for $9bn (£5.7bn).
Iriving Picard, who is seeking to recover funds for Madoff's Ponzi scheme victims, is alleging 24 counts of fraud and misconduct against HSBC.Iriving Picard, who is seeking to recover funds for Madoff's Ponzi scheme victims, is alleging 24 counts of fraud and misconduct against HSBC.
He alleges that HSBC aided Madoff's scheme through the creation of a network of international feeder funds.He alleges that HSBC aided Madoff's scheme through the creation of a network of international feeder funds.
HSBC was not available for comment. Madoff is serving 150 years for a $65bn fraud.HSBC was not available for comment. Madoff is serving 150 years for a $65bn fraud.
In the complaint filed on Sunday in the US, Mr Picard named other defendants in the filing, including the management companies and providers of these feeder funds.In the complaint filed on Sunday in the US, Mr Picard named other defendants in the filing, including the management companies and providers of these feeder funds.
The complaint alleges that the defendants were well aware of the signs of fraud that were already circulating around Bernard L Madoff Invesment Securities (BLMIS).The complaint alleges that the defendants were well aware of the signs of fraud that were already circulating around Bernard L Madoff Invesment Securities (BLMIS).
The compaint says that HSBC had twice asked accountants KPMG to identify concerns with BLMIS, and KPMG twice reported serious risks already known to HSBC.The compaint says that HSBC had twice asked accountants KPMG to identify concerns with BLMIS, and KPMG twice reported serious risks already known to HSBC.
"Had HSBC and the defendants reacted appropriately to such warnings and other obvious badges of fraud... the Madoff Ponzi scheme would have collapsed years, billions of dollars, and countless victims sooner," said Mr Picard."Had HSBC and the defendants reacted appropriately to such warnings and other obvious badges of fraud... the Madoff Ponzi scheme would have collapsed years, billions of dollars, and countless victims sooner," said Mr Picard.
"The defendants were wilfully and deliberately blind to the fraud, even after learning about numerous red flags surrounding Madoff.""The defendants were wilfully and deliberately blind to the fraud, even after learning about numerous red flags surrounding Madoff."
The other defendants include former Austrian lender Bank Medici, and Italian bank UniCredit.The other defendants include former Austrian lender Bank Medici, and Italian bank UniCredit.
The lawsuit was filed just two days before the two-year expiration of the trustee's mandate. The lawsuit was filed just days before the two-year expiration of the trustee's mandate.
It follows similar suits filed against banks JP Morgan Chase and UBS.It follows similar suits filed against banks JP Morgan Chase and UBS.
Bernard Madoff admitted defrauding thousands of investors through a Ponzi scheme, which paid out using new investors' money rather than from any profits.Bernard Madoff admitted defrauding thousands of investors through a Ponzi scheme, which paid out using new investors' money rather than from any profits.
The scheme, which had been running since the early 1990s, unravelled when Madoff's investors tried to withdraw about $7bn at the height of the economic downturn. Madoff could not produce the money.The scheme, which had been running since the early 1990s, unravelled when Madoff's investors tried to withdraw about $7bn at the height of the economic downturn. Madoff could not produce the money.