Marathon Madoff Ponzi case settled before opening in High Court

Disgraced former financier died on Wednesday

Bernie Madoff, who died on Wednesday. Photograph: Bloomberg

Bernie Madoff, who died on Wednesday. Photograph: Bloomberg

 

A marathon case due to open in the High Court this week concerning the Ponzi scheme run by Bernie Madoff settled on Wednesday shortly after Madoff died in prison.

The 82-year-old former Wall Street investor who defrauded thousands of investors out of billions had been in the 12th year of his 150-year prison term for the Ponzi fraud.

A British Virgin Islands (BVI) registered investment fund, Defender Ltd had sued HSBC Continental Europe (formerly HSBC France) of Grand Canal Square, Dublin, in the High Court.

Reliance Management BVI Ltd and Reliance International Research LLC, Defender’s investment manager, had been joined by HSBC as third parties.

Defender claimed negligence and breach of contract regarding HSBC’s alleged role as a custodian of funds lost as a result of fraud by its alleged sub-custodian Bernie L Madoff Securities LLC.

That company was operated by Madoff, who was involved in a $65 billion (54 billion) Ponzi scheme in the US.

It was alleged the Reliance companies had full knowledge of all risks associated with funds being entrusted to the Madoff company and of all risks associated with that.

The claims were denied.

The case was initiated in 2013 and has been subject of multiple pre-trial applications and hearings, incurring huge costs.

The full hearing was due to begin on Tuesday before Mr Justice Mark Sanfey and was scheduled to last a marathon 24 weeks.

Confidential terms

The judge granted adjournments to allow talks to proceed and was told at 4pm on Wednesday by Dermot Gleeson SC, for Defender, it had been resolved by agreement on confidential terms.

Counsel asked for an adjournment to next month when it is expected the court will be requested to make final orders.

The judge congratulated the parties on their hard work and adjourned it to May.

He said counsel may not have been aware but Mr Madoff had just died.

Counsel said they were aware.