Madoff trustee sues HSBC

| 05/12/2010

(New York Times): The trustee seeking assets for victims of Bernard L. Madoff’s global Ponzi scheme filed a lawsuit on Sunday seeking $9 billion from a roster of defendants headed by HSBC, the London-based financial giant with hedge fund clients that fed piles of cash into the enormous fraud. According to the complaint, a hedge fund official dealing with HSBC once attributed Madoff’s stellar performance – which later turned out to be purely fictional – to a "magic formula" that no one else could replicate.The lawsuit is the third multibillion-dollar complaint the Madoff trustee, Irving H. Picard, has filed against major financial institutions in the last two weeks. Under federal bankruptcy law, the trustee must file all his recovery claims within two years of the initial bankruptcy filing.

That did not occur until Dec. 15, 2008, but the bankruptcy court has defined the filing date as Dec. 11, 2008, the day of Madoff’s arrest.

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