Four years after Bernard Madoff pleaded guilty to running the largest Ponzi scheme in history, investors are still trying to get their money back.
Bloomberg reports that Thema International Fund is seeking about $1.3bn from HSBC at a 14-week trial scheduled to start at the High Court in Dublin Tueday. The case is one of dozens to focus on banks’ role as 'custodians' to investment funds that deposited money with Madoff.
HSBC faces more than 50 complaints in Ireland over claims it failed to discover Bernie Madoff’s activities. The fraud hurt many investment vehicles like Dublin-based Thema, funds known as UCITS that target retail investors. At least three UCITS, which stands for Undertakings Collective Investment in Transferable Securities, were liquidated because of Madoff-related losses.
'These cases tend to underline the duties and obligations that all intermediaries in the financial chain face and that they will be under much heavier scrutiny for in the years ahead', said Richard Reid, a research fellow for finance and regulation at the University of Dundee in Scotland. 'It all adds to the trend already in evidence that depository institutions are now clearly recognized as being key systemic players in the financial system and hence, targets for more intrusive regulatory examination'.
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