Irving Picard, the trustee in charge of securing money stolen by Ponzi schemer Bernie Madoff, is accusing HSBC of continuing to deal with Madoff feeder funds despite the London bank’s significant suspicions about the fund. It is on those grounds that Mr. Picard is suing HSBC for $9 billion.
As was the case with Mr. Picard’s lawsuit against JPMorgan Chase, the allegations are fairly serious. The Financial Times reports that Madoff issued statements to the bank that included some assertions that might have been cause for some suspicion:
Among other things, the statements included claims that Mr. Madoff was parking investors’ cash in a money market fund that ceased to exist in 2005, that trades had settled on non-working days, and at prices outside the reported daily price range.
With this kind of evidence laying around for years before Madoff got caught, it’s no wonder the fraudster said it was “amazing” that the Securities and Exchange Commission didn’t catch him sooner.
mtaylor [at] observer.com | @mbrookstaylor