A lawyer representing investors who fell victim to fraudster Bernard Madoff 's £40billion 'Ponzi' scheme is suing Swiss bank UBS and others for more than £1.25billion.
UBS stands accused of facilitating Madoff 's swindle - in which investors were shown false returns based on cash from new victims - by sponsoring so-called 'feeder' funds that channelled money into the fraudulent operation.
The complaint - lodged by court - appointed trustee Irving Picard - alleges that UBS lent the funds 'an aura of legitimacy', allowing the bank to collect nearly £50million in middleman fees. Picard said that despite identifying warning signs about Madoff Investment Securities, UBS 'chose to enable Madoff's fraud for their own gain'.
Complaint: UBS has been accused that it was party to 23 counts of fraudulent transfers and other misconduct
Picard has filed around 20 lawsuits to recover £11billion from feeder funds that poured money into Madoff 's pockets and claims to have recouped £950million from former clients of the conman, who is serving a 150-year jail term.
His case alleges that UBS worked with co-defendant Access International Advisors, led by French executive Thierry Magon de la Villehuchet who was found dead in an apparent suicide in New York following the discovery of Madoff's fraud. He was said to have been distraught at losing nearly £900million of clients' money and around £30million of his own.
UBS said investors had been well aware that funds were being directed to Madoff, adding that it 'does not have responsibility to these shareholders for the unfortunate results of the Madoff scandal'.
Picard has not yet said whether he intends to file claims against other European banks. But HSBC could yet find itself embroiled in the saga, due to a ruling by a Luxembourg court earlier this year.
The court told clients filing claims against UBS to seek redress through the US liquidation process being led by Picard.
The ruling means that investors who claim to have lost £630million through Herald, a fund affiliated with a Luxembourg division of HSBC, could add their claims to those being managed in the US.
HSBC declined to comment.
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