Of course the investors are appealing but one win at at time, amiright?
The suits were filed in the fall by investors who lost millions in the LuxAlpha Sicav-American Selection fund which had 95% of its fund invested with Bernie Madoff. The fund claims that it had $1.4 billion in net assets a month prior to Madoff’s arrest.
UBS acted as the custodian while E&Y was the auditor and were sued for “seriously neglecting” their supervisory duties for the fund. Investors in the fund filed more than 100 lawsuits against the two companies.
Luxembourg’s commercial court said in a ruling today concerning 10 test cases that investors can’t bring individual lawsuits for damages. The court said it’s up to the liquidators of the funds that invested with Madoff to seek the “recovery of the capital assets.”
In other words, UBS and E&Y, you’re going to get sued by Irving Picard de Luxembourg rather than 100+ pissed off individuals whose life savings went *poof*. Setting legal precedent aside, taking emotion of the equation works wonders for making an argument.
UBS, Ernst & Young Win Bid to Block Madoff Lawsuits [Bloomberg BusinessWeek]
Just when we think the Madoff beat has quieted down, we’re reminded that the tentacles of the Ponzi scheme of our lifetime reach far and wide and for that we are thankful.
Not because we enjoy the carnage that has come about from this particular scheme. No, that would be in bad taste. We’re mostly thankful because we’re certain that today, 90% of you will spend the entire day gabbing about turkey-lurkey-do instead of sending us details on your firm’s cost saving initiative du jour, thus making it a slow news day.
So, thank you Berns, for providing us a story on this most non-productive day of the year:
Private and institutional investors who lost money through Access International Advisors LLC’s LuxAlpha Sicav-American Selection are suing UBS and Ernst & Young for “seriously neglecting” their supervisory duties of the fund. A Luxembourg court will decide in hearings that started today whether investors have the right to bring direct claims against the fund’s custodian and auditor.
“These cases are very important,” Pierre Reuter, who represents clients in six of the lawsuits being reviewed over four days of hearings, said by telephone before the hearing. “They could set the course for some 100 pending cases and many more to come.”
Since these are simply “test cases” the plaintiffs will be anxious to see the results, especially since the Swiss are involved. A pallet of Toblerones will certainly find their way to the offering table at some point. Whether UBS allows E&Y to squeeze in on this valuable bargaining chip remains to be seen.
UBS, Ernst & Young Face Test Cases Over Madoff Funds [Bloomberg]
That’s not an official title but if you’ve got suggestions for someone else, please, enlighten us.
He told the court that he did not conduct any independent auditing or verification of financial statements or tax returns provided by Madoff and “others” at Bernard L. Madoff Investment Securities LLC in New York.
Friehling did not state who the ‘others’ were but the U.S. Attorney hinted that we’ll get to know sometime. For now, Friehling is a free man, out on $2.5 million bond until his sentencing which is tentatively set for February.
He faces up to 114 years in prison but similar to Madoff’s chief bald-faced liar, Frank DiPascali, his cooperation should result in a lighter sentence. And by lighter we’re guessing that means he’ll still leave prison horizontally.