BANGALORE: The trustee liquidating Bernard Madoff's investment management firm sued UBS AG and various other entities for allegedly profiting from the massive Ponzi scheme, according to a court filing.
The lawsuit, filed early on Wednesday in a Manhattan bankruptcy court, claims that UBS and another defendant Access International Advisors LLC extended the Ponzi scheme to European investors and were liable for at least $2 billion for their roles in masking the fraud.
UBS was not immediately available for comment.
According to the 101-page filing, UBS helped create "feeder funds" including Luxalpha SICAV and Groupement Financier Ltd, which withdrew about $796 million in the 90 days before Madoff's firm filed for bankruptcy.
They also withdrew about $1.12 billion in the preceding six years, the lawsuit by Irving Picard said.
Picard also alleged that UBS appeared to have made at least $80 million in fees from the Ponzi scheme.
"There were no checks and balances on BLMIS (Bernard L. Madoff Investment Securities LLC), and the UBS defendants knew it because the system - which invited fraud - was knowingly put in place and carried out by the UBS defendants," the court filing said.
(Reporting by Santosh Nadgir in Bangalore; Editing by Gopakumar Warrier)
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