Tuesday 12 December 2017

HSBC must detail monies paid to Madoff, says judge

Fraudster Bernie Madoff. Photo: Getty Images
Fraudster Bernie Madoff. Photo: Getty Images

Tim Healy

A HIGH Court judge has directed the Irish arm of European banking giant, HSBC, to outline clearly the extent to which monies were paid over to companies of jailed US fraudster Bernard Madoff.

Mr Justice Frank Clarke said yesterday HSBC Institutional Trust Services (Ireland) Ltd (HITSI), Grand Canal Square, Dublin, should incorporate the specified pleas in its defence to actions against it by two mutual funds over alleged losses after monies were allegedly passed on to Madoff companies.

HITSI should specify, at least generally, the extent to which it was claimed monies were paid to Madoff entities in a capacity as sub-custodian of those monies or as dealer-broker, the judge said. Such specified pleas could help in reducing the amount of legal disclosure needed for the case and consequently reduce legal costs, he noted.


He said HITSI had not specified in writing the extent to which funds may have been handed over to Madoff-related entities in their capacity as dealer-broker or otherwise. If it was accepted significant monies were handed over in a capacity as sub-custodian or as dealer-broker, that would be relevant.

The judge adjourned to Tuesday next any further directions for management of the cases.

The judge's directions were made in proceedings by Thema and AA (Alternative Advantage) PLC, both of Fitzwilton House, Wilton Place, Dublin, against HITSI related to the Madoff bankruptcy.

The judge is case-managing some 47 cases brought in the Irish courts against HSBC over allegedly entrusting more than $500m in investor monies to Bernard Madoff and his companies.

Madoff pleaded guilty to using money from new clients to pay off earlier investors and was sentenced by the US courts to 150 years' imprisonment in June, 2009. The judgment meant that Madoff would spend the rest of his life in prison.

Irish Independent

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