BUSINESS
11/24/2010 08:11 am ET Updated Dec 06, 2017

Madoff Trustee Sues UBS, Investors For Ponzi Profits

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)

Copyright 2010 Thomson Reuters. Click for Restrictions.