(Updates with case background in third paragraph.)
Jan. 23 (Bloomberg) -- HSBC Holdings Plc, Europe’s largest lender, withdrew a settlement offer with investors in a feeder fund that lost money in Bernard Madoff’s Ponzi scheme after a U.S. court dismissed the case.
The individual investors in 2009 sued Thema International Fund Plc and 27 other defendants, including HSBC, Thema’s custodian bank, alleging the bank should have known of Madoff’s fraud. HSBC asked the court to dismiss the case in October, saying it should be heard in Ireland and Luxembourg. The court today found Ireland was a “more appropriate forum,” the London-based lender said in a statement today.
Madoff, 73, pleaded guilty in 2009 to orchestrating what prosecutors called the biggest Ponzi scheme in history. He is serving a 150-year sentence in a federal prison in North Carolina. HSBC amended its settlement with the investors in November after the bank’s original offer was rejected by a U.S. judge two months earlier. The proposal offered shareholders in Thema as much as $62.5 million.
The court “declined to consider whether to grant approval of the proposed settlement between HSBC and the plaintiff, as was required for the settlement to become effective,” the bank today.
“In light of the court’s decisions, HSBC has terminated the settlement agreement,” the lender said. “The plaintiff contests HSBC’s right to terminate and has appealed the court’s decisions.”
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