Swiss banks under fire over Madoff fraud

The Lausanne headquarters of Banque Cantonale Vaudoise Keystone

Three more Swiss banks have been sued in connection with the financial scam run by Bernard Madoff. On Wednesday, the trustee overseeing the liquidation of Madoff’s investment firm filed complaints in the US bankruptcy court in New York.

This content was published on June 7, 2012 and agencies

Trustee Irving Picard hopes to recover several hundred million dollars generated through investments in feeder funds in Madoff’s former company. The complaints seek $354.9 million (SFr340 million) from Swiss private bank EFG Bank SA and $179.4 million from private bank Lombard Odier Darier Hentsch & Cie (LODH).

The third one is the cantonal bank of Vaud, which Picard is suing for around $10 million. This bank as well as LODH denied any wrongdoing on Thursday; EFG has refused to comment so far.

The three banks are not the first Swiss financial institutions to come under fire through the Madoff liquidator. In December, Picard filed lawsuits against Credit Suisse and Bank Julius Bär.

UBS has also been sued; thus far a judge has rejected Picard’s request for money. Banks from other countries have also been implicated in the scandal.

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.

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