Bloomberg News

Julius Baer, Falcon Sued by Trustee for Madoff-Related Funds

December 12, 2011

(Updates with banks’ responses from third paragraph.)

Dec. 9 (Bloomberg) -- Julius Baer Group Ltd., the 121-year- old Swiss wealth manager, and Falcon Private Bank Ltd. were sued by the trustee liquidating Bernard Madoff’s former investment firm who is seeking to recover $76 million in redemptions.

Irving Picard filed two lawsuits yesterday in U.S. Bankruptcy Court in Manhattan for a return of funds that were transferred to the two Swiss banks by investors in Fairfield Sentry Ltd., a feeder fund for Madoff’s firm. The trustee seeks about $37 million from Julius Baer and about $39 million from Falcon, a Zurich-based private bank owned by the government of Abu Dhabi.

“We cannot comment on pending legal cases,” said Jan Vonder Muehll, a Zurich-based spokesman for Julius Baer, which manages 166 billion Swiss francs ($179 billion) for private clients.

In 2010, the liquidators of the Fairfield funds started separate litigation against Julius Baer, the bank said in its 2010 annual report.

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 $19 billion in principal, Picard has said. Fairfield is in liquidation in the British Virgin Islands. Picard has filed similar lawsuits to recover investments taken out of Madoff’s firm before the fraud was exposed.

Irene Franco, a spokeswoman for Falcon, said the firm hasn’t been informed about the claim.

The cases are Irving Picard v. Bank Julius Baer & Co., 11- 2922, and Irving Picard v. Falcon Private Bank, 11-2923, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Keith Campbell, Steve Bailey.

To contact the reporters on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net Giles Broom in Geneva at gbroom@bloomberg.net

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


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