UBS cleared in Madoff case
The Swiss bank UBS cannot be held responsible for funds it managed tied to the fraudulent schemes of Bernard Madoff, according to the latest ruling.
A court in Luxembourg said that investors who lost money to the American through a fund set up by UBS cannot seek compensation directly from the bank.
It rejected the demands of an initial small group of investors in the LuxAlpha fund who wanted to file individual claims against UBS, rather than having to go through the fund’s liquidators.
The verdict could have direct implications for many pending cases against UBS, which acted as a custodian for, but did not run, the LuxAlpha and LuxInvest funds. Together they lost about $1.7 billion (SFr1.82 billion) to Madoff.
The lawyer representing the clients in four of the ten cases being reviewed said he would appeal against the decision.
Madoff, a former non-executive chairman of the Nasdaq stock market, is serving a 150-year term in a United States prison after pleading guilty last year to a multi-billion-dollar Ponzi scheme that ruined large and small investors, including charities, around the world.
The LuxAlpha liquidators, appointed by a judge in April 2009 to recoup investor losses, filed a lawsuit in December, suing UBS, the fund’s manager and Luxembourg’s financial regulator among others.
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