Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

HSBC agrees $62 million Madoff settlement

HSBC has become the first custodian bank to settle in the class action law suit linked to Bernard Madoff, by agreeing to pay out $62 million (£38 million) to out-of-pocket investors.

The settlement with Irish-domiciled Thema fund investors is worth an estimated 20 cents on the dollar for the vehicle's $312 million in accrued real losses, reports claimed. HSBC acted as custodian for the fund, however the bank did not admit liability for investors' eventual losses.

The settlement reflects only a tiny portion of HSBC's exposure in connection with Madoff, who in 2008 admitted the entire wealth management arm of his business, Bernard L Madoff Investment Securities, had been an elaborate Ponzi scheme.

By the time of Madoff's arrest in December 2008, HSBC had become custodian or administrator to a number of funds linked to the former Wall Street investor.  These had accrued real losses of around $4.3 billion (£2.62 million). 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Your Business: Cover Star Club

Profile: John Brett's big plans for Anderson Strathern

Profile: John Brett's big plans for Anderson Strathern

After a high flying role at Aberdeen, Anderson Strathern's new boss explains why he switched product distribution for private clients

Wealth Manager on Twitter