UBS sued for $2bn over Madoff's Ponzi scheme

Picard charged UBS with lending "an aura of legitimacy" to the Madoff funds

Swiss bank UBS is being sued for over $2bn (£1.3bn) over allegations that it "enabled" US fraudster Berni Madoff's Ponzi scheme through several feeder funds controlled by the bank.

Irving H Picard, trustee for the liquidation of Bernard L Madoff Investment Securities LLC, states 23 counts of fraud and misconduct in the lawsuit lodged against UBS and its various associates at a US bankruptcy court.

Picard also charged UBS with lending "an aura of legitimacy" to the Madoff funds Luxalpha SICAV and Groupement Financier by serving as their sponsor, custodian and administrator.

"Madoff's scheme could not have been accomplished 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," Picard's lawyer, David Sheehan, said.
Picard also claimed that UBS made at least $80m in fees from Madoff's scheme.

Madoff's clients lost billions investing in funds that were worth only a fraction of what he claimed. He was sentenced to 150 years in prison for the scheme exposed in 2008.