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UBS in firing line over Madoff fraud

Swiss bank UBS is being sued for $2 billion (SFr1.99 billion) in the United States in connection with the financial scam run by Bernard Madoff.

The complaint against UBS was filed in the US bankruptcy court in New York on Wednesday by Irving Picard, the trustee overseeing the liquidation of Madoff’s investment firm.

Picard claims that UBS and “related entities and individuals” helped to spread Madoff’s pyramid scheme to European investors and played an important role in masking the fraud.

He also alleges that UBS appeared to have made at least $80 million from the 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,” according to the documents filed by Picard.

Madoff, a former non-executive chairman of the Nasdaq stock market, was arrested at the end of 2008 and charged with securities fraud. He pleaded guilty and was sentenced to 150 years in prison.

His multi-billion-dollar scheme ruined many large and small investors.

There has been no immediate reaction from UBS to Picard’s move.

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SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR