Bloomberg News

BNP Paribas Unit Sued for $1 Billion Over Madoff Redemptions

November 05, 2011

Nov. 4 (Bloomberg) -- A unit of BNP Paribas SA was sued for almost $1 billion by the trustee liquidating Bernard Madoff’s former investment firm over redemptions by a feeder fund of the con man’s scheme that was transferred to the bank.

The Cayman Islands-based feeder fund, Harley International Ltd., transferred about $975.5 million to BNP Paribas Arbitrage, trustee Irving Picard said in a complaint filed yesterday in U.S. Bankruptcy Court in Manhattan. Picard said he won a default judgment for more than $1 billion against Harley last year but hasn’t recovered any money from the judgment.

Madoff, who pleaded guilty to fraud charges, is serving 150 years in prison for the largest Ponzi scheme in U.S. history. Investors lost about $20 billion in principal, Picard has said. JPMorgan Chase & Co. on Nov. 1 won dismissal of $19 billion in claims by Picard, who sought common-law fraud damages on behalf of Madoff customers, claiming the bank aided in the fraud.

Antoine Sire, a spokesman for Paris-based BNP Paribas, didn’t immediately respond to an e-mailed request seeking comment on the complaint after regular business hours yesterday.

The case is Irving Picard v. BNP Paribas Arbitrage, 11- 2796, U.S. Bankruptcy Court, Southern District of New York (Manhattan.)

--Editors: Michael Hytha, Joe Schneider

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

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


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