HSBC wins dismissal of class action suit over Madoff feeder funds
HSBC Bank Plc defeated a class-action lawsuit by investors who lost money in Bernard Madoff’s fraud and claimed the bank ignored warnings while administering a group of “feeder funds” that placed money with the con man.
A judge on Thursday threw the case out, saying the court lacked jurisdiction over the HSBC units located outside the US that were sued.
US District Judge Laura Taylor Swain also said a law governing securities fraud cases barred the claims against HSBC’s US unit.
The Madoff investors said HSBC aided the fraud by marketing structured financial products that funnelled hundreds of millions of dollars to Madoff through the feeder funds.
The bank ignored “serious red flags” that should have alerted officials to the fraud, according to the investors.
Madoff, 78, pleaded guilty in 2009 and was sentenced to 150 years in prison.