Madoff trustee slams UBS, sues for $2B

The trustee trying to recover money for investors cheated by jailed financier Bernard Madoff announced a lawsuit Wednesday against the Swiss bank UBS AG and related entities and individuals, alleging they collaborated in Madoff’s Ponzi scheme.

The lawsuit alleges 23 counts of financial fraud and misconduct, and seeks to recover at least $2 billion to be distributed to Madoff’s victims, who lost billions when Madoff revealed in December 2008 that his investment company was a gigantic fraud, Trustee Irving Picard said. It was filed in U.S. Bankruptcy Court.

UBS actively assisted Madoff’s scheme by serving as the sponsor, custodian and administrator of various affiliated feeder funds, Picard alleged.

The full complaint was filed under seal. Only a redacted version was available to the public.

“We have battled with UBS regarding disclosure of information about the bank’s knowledge of Madoff,” Picard said.

“Unfortunately, they are still trying to shield this information from the public by designating all of their information as confidential. We intend to have the designation removed and the complaint made public as soon as possible.”

A spokesman for the bank declined to comment.

Madoff’s scheme could not succeed “unless UBS had agreed not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did,” said David Sheehan, counsel for the trustee.

Without UBS’s serving as promoter, custodian and administrator, “Madoff’s fraud would have been diminished in both scope and duration,” Sheehan added.

Madoff is serving 150 years in federal prison for the fraud.

Related Topics: UBS AG