A United States judge has rejected a $2 billion (SFr1.7 billion) case against Swiss bank UBS brought by a trustee seeking money for victims of fraud by Bernard Madoff.This content was published on November 2, 2011 - 09:37
The case was thrown out by Manhattan District Court judge Colleen McMahon on Tuesday along with most of a $19.9 billion lawsuit against JPMorgan Chase.
Trustee Irving Picard has filed roughly 1,050 lawsuits on behalf of former Madoff customers since Madoff’s Ponzi-scheme firm collapsed in 2008. The lawsuits against UBS and other banks that had steered client money to Madoff accused the defendants of ignoring red flags about Madoff's fraud in order to win more fees or commissions.
In rejecting the UBS and JP Morgan cases, the judged ruled that Picard had no power to pursue common law claims against the banks, saying such claims properly belonged to former Madoff customers. She said she was also "persuaded" by the essentially identical arguments raised by JP Morgan and UBS.
The judge likened Picard's position to that of a garage owner trying to sue on behalf of a customer whose car got scratched while stuck in traffic, before it was parked in the garage.
UBS spokeswoman Torie von Alt said the bank was pleased with the decision. Picard plans to appeal against the decision.
Madoff was sentenced to 150 years in prison in 2009 for estimated fraud of up to $65 billion.
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