HSBC in Madoff case
U.S. judge rejects an HSBC settlement in Madoff case
.jpg)
A Manhattan federal judge rejected HSBC Holdings Plc's proposed $62.5m settlement with investors in an Irish fund that lost money in Bernard Madoff's Ponzi scheme.
In a ruling on Wednesday, U.S. District Judge Richard Berman said the accord announced June 7 "is not fair, reasonable or adequate -- even at this preliminary stage" to investors in Thema International Fund Plc.
HSBC said it had acted as a custodian to the fund, and provided administration and other services. It was sued in January 2009, one month after Madoff's fraud was uncovered.
Berman said the accord had several "obvious deficiencies." Among these were inadequate disclosure of legal costs, and the setting aside of a $10m "reserve" for legal fees and expenses for investors to pursue claims against non-settling defendants outside the United States.
The judge said he would consider a revised accord, and "generally favors the voluntary settlement of matters before it, including the settlement of purported class actions."
"We are disappointed that the Court did not grant preliminary approval at this time," Frank Bottini, a lawyer for lead plaintiff Neville Seymour Davis, said in an email.
"We are optimistic that we can address the Court's concerns and that the settlement will eventually be approved," he said.
Rob Sherman, an HSBC spokesman, had no immediate comment.
HSBC in June estimated that Thema investors lost about $312m. It also said various funds it serviced transferred a net $4.3bn to Madoff's firm during the period it serviced those funds.
Irving Picard, the trustee seeking money for Madoff victims, accused HSBC in a separate lawsuit of ignoring "red flags" about Madoff's fraud.
A different federal judge, Jed Rakoff, in July voided about $6.6bn of Picard's claims against HSBC, saying the trustee lacked authority to bring them.
Madoff, 73, pleaded guilty to running his Ponzi scheme in March 2009, and is serving a 150-year prison sentence.
The case is In re: Herald, Primeo, and Thema Securities Litigation, U.S. District Court, Southern District of New York, No. 09-00289.
(Published by Reuters - September 7, 2011)
___________
______
Read more - Top stories
7/8/11 - JPMorgan wins dismissal of Madoff conspiracy suit - click here.
5/10/11 - Brazil's Itau ordered to pay damages in Madoff case - click here.
5/5/11 - Madoff trustee seeks OK to start paying victims - click here.
2/7/11 - SEC officials who missed Madoff now in top spots at major law firms - click here.
1/26/11 - SEC accused of negligence in Bernard Madoff Ponzi victim lawsuit – click here.
12/6/10 - HSBC sued for $9bn by Madoff trustee over claims lender aided fraud – click here.
8/5/10 - Madoff trustee wins $180m Vizcaya judgment – click here.
8/2/10 - Federal lawsuits seek $30m in Madoff family money – click here.
5/25/10 - Madoff investors, banks settle for $15.5bn, lawyers say – click here.
10/22/09 - Lawsuit: Madoff's workplace was rife with cocaine, sex – clique aqui.
10/14/09 - Two Madoff victims file lawsuit against the SEC – click here.
9/1/09 - Madoff liquidator may 'claw back' charities' fake profits – click here.
8/12/09 - Madoff's finance chief pleads guilty to fraud, other charges – click here.
8/10/09 - Bernard Madoff aide Frank DiPascali is to plead guilty – click here.
7/14/09 - Madoff starts sentence at North Carolina prison – click here.
7/10/09 - Madoff won't appeal 150-year sentence, attorney says – click here.
7/8/09 - Ruth Madoff to get passport back: court documents – click here.
6/30/09 - Bernard Madoff faces potential 150 years in prison after lawyer confirms he is likely to plead guilty – click here.
6/23/09 - Madoff suits add details about fraud – click here.
6/5/09 - UBS, HSBC have duty to Madoff investors – click here.
5/19/09 - Meticulous Madoff records said to aid probe of high-return investors – click here.
4/24/09 - Madoff unit generates three new bids for assets, trustee says – click here.
4/16/09 - Financier Merkin testified in Madoff probe, NY judge says – click here.
4/8/09 - SEC seeks to block bid to force Madoff bankruptcy – click here.
3/27/09 - Some Madoff investors complain their lawyers were to blame – click here.
3/25/09 - Freedom for Madoff before sentencing? – click here.
3/18/09 - Madoff's accountant is charged with securities fraud – click here.
3/17/09 - Madoff property is subject to forfeiture, U.S. says – click here.
3/13/09 - Madoff jailed following guilty plea in largest Ponzi Scheme – click here.
3/11/09 - Madoff faces life in prison on 11 criminal charges – click here.
2/6/09 - U.K.'s prince Charles targeted by Madoff marketer, witness says - click here.
2/4/09 - Witness on Madoff tells of fear for safety – click here.
2/2/09 - Hedge fund manager defended by Madoff's lawyer gets 40 months – click here.
1/28/09 - Troubled times bring mini-Madoffs to light – click here.
1/21/09 - Luxembourg funds suspended after Madoff investments – click here.
1/21/09 - Madoff scandal may lead to new rules on adviser accountability – click here.
1/14/09 - U.S. to ask another judge to revoke Madoff's $10m bail – click here.
1/9/09 - Madoff investigators said to be struggling over scheme's scope – click here.
12/19/08 - Madoff agrees to receiver, asset freeze extension, SEC says – click here.
12/17/08 - SEC failed to act on 'credible, specific' Madoff tips, Cox says – click here.
______