Bloomberg News

Citigroup Seeks Dismissal of Swap-Linked Madoff Trustee Claims

August 16, 2012

Citigroup Inc. asked a judge to dismiss $130 million of claims by the liquidator of Bernard Madoff’s brokerage, saying the funds were received as part of a swap transaction with a hedge-fund customer who was betting on the performance of a feeder fund to the Ponzi scheme.

So-called safe harbor laws, devised to protect banks, stop the Madoff trustee from undoing swap deals, the bank said in a filing in federal court in Manhattan.

U.S. District Judge Jed Rakoff took the Citigroup case out of bankruptcy court, along with hundreds of other Madoff suits, to decide what trustee Irving Picard is permitted to do under safe-harbor law. Picard originally sued Citigroup for $430 million.

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net


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