Bloomberg News

Barclays Sued by Trustee Liquidating Madoff’s Investment Firm

September 02, 2011

Sept. 2 (Bloomberg) -- Barclays Plc and five other companies were sued by the trustee liquidating the money management firm of convicted Ponzi scheme mastermind Bernard Madoff, according to court records.

Trustee Irving Picard, who is seeking to recover money transferred from Madoff’s company, sued Barclays yesterday for $67.4 million. Picard also sued Sumitomo Mitsui Trust Holdings Inc. for $54.3 million, Korea Exchange Bank for $33.6 million, Cathay Life Insurance Co. for $41.7 million, Banque Privee Espirito Santo SA for $11.4 million and Banca Carige SpA for $10.5 million.

All the transfers to the entities sued were derived from investment made with Bernard L. Madoff Investment Securities LLC by Fairfield Sentry, a Madoff feeder fund run by Fairfield Greenwich Group, Picard said.

The funds the trustee seeks to recover from Barclays were “transfers of customer property collectively made to the Barclays defendants,” Picard wrote in the complaint against the London-based bank.

Picard has sued investors, banks and others he claims profited from Madoff or should have known of his fraud, seeking a total of about $100 billion. He has raised more than $8.6 billion, or almost half the $17.3 billion in principal Madoff investors who have submitted claims for losses in the fraud, including a $1 billion settlement with hedge-fund firm Tremont Group Holdings Inc., announced July 28.

Interim Reports

Picard files an interim report with the court for six-month periods. The next one, for the period ending Sept. 30, will be filed during the fourth quarter.

Giles Croot, a Barclays spokesman, declined to immediately comment on the lawsuit.

Alan Lee, a Cathay Financial spokesman, couldn’t immediately be reached for comment yesterday after regular business hours in Taipei

Roberto de Vito, an asset manager with Banque Privee Espirito Santo, didn’t immediately respond to an e-mail seeking comment on the lawsuit that was sent after business hours in Lausanne, Switzerland.

A message sent to Korea Exchange Bank’s press office after Seoul business hours seeking comment on the lawsuit against it wasn’t immediately returned.

Sumitomo Mitsui Trust Holdings Inc., based in Tokyo, couldn’t immediately be reached for comment yesterday.

Banca Carige

Banca Carige, based in Genova, Italy, couldn’t immediately be reached for comment on the lawsuit against it.

Madoff is serving a 150-year prison sentence for running the biggest Ponzi scheme in history.

The cases are Picard v. Barclays Bank (Suisse) SA, 11-ap-02569, Picard v. Cathay Life Insurance Co., 11-ap-2568, Picard v. Banca Carige SpA, 11-ap-2570, Picard v. Banque Privee Espirito Santo SA, 11-ap-2571, Picard v. Korea Exchange Bank, 11-ap-2572, Picard v. Sumitomo Mitsui Trust Holdings Inc., 11- ap-2573, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--With assistance from Linda Sandler. Editors: Michael Hytha, John Pickering

To contact the reporter on this story: Thom Weidlich in New York at tweidlich@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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