HSBC Madoff class action settlement capped at $62.5m

HSBC has announced its settlement with defendants invested in a fund exposed to ponzi fraudster Bernard Madoff’s wealth management business has been capped at $62.5m.

Bernard Madoff
Bernard Madoff

The bank had been the subject of a class action by investors in the Irish-domiciled Ucits fund Thema International, whose assets had been invested with Bernard L Madoff Securities.

The ammended settlement will see HSBC pay from $52.5m, up to a maxium of $62.5m.

HSBC had provided custodial, administration and other services to Thema, which had a purported net asset value of Thema, as at November 30, 2008, valued at $1.1 billion. It estimated that Thema’s actual transfers to Madoff Securities minus its actual withdrawals was approximately $312m.

The amended settlement agreement will be subject to a number of conditions, “including the court’s certification of a settlement class of investors worldwide, resolution of any objections that may be filed, and approval of the settlement as fair and reasonable”.

The final amount will depend on the number of Thema shareholders who choose to exclude themselves from the settlement.

Madoff was sentenced to 150 years in prison in 2011 after being convicted over charges related to his giant ponzi scheme.

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