Please ensure Javascript is enabled for purposes of website accessibility

Madoff investors, banks settle over $15.5 billion

Madoff investors, banks settle over $15.5 billion

Banks agreed to pay about $15.5 billion to settle claims by about 720,000 investors outside the U.S. who lost money in Bernard Madoff’s fraud, according to a group of law firms that represent victims.

About 80 percent of the clients represented by the firms are covered by the settlements, said Miguel Larios, a senior associate at Cremades & Calvo-Sotelo. The Madrid firm last year helped set up a network of lawyers that took on Madoff-related complaints. The New York Times reported the settlement agreement Monday.

European banks have been sued in France, Ireland and Luxembourg by investors seeking repayment of losses from Madoff funds. UBS AG and HSBC Holdings Plc, Europe’s largest bank, face more than 100 investor complaints accusing them of failing in their duties as custodians for European Union-regulated funds.

“We have never, ever heard of these settlements,” Edouard Fremault, a senior analyst at Deminor International, which advises about 1,200 investors in Europe who lost money invested with Madoff, said in a telephone interview. “We are a bit skeptical. I am certain that there’s been no deal in France, Belgium, Luxembourg or the Netherlands.”

Javier Cremades, chairman of Cremades & Calvo-Sotelo and president of the law firm network, said at a press conference Tuesday that individual firms are generally prohibited from providing names and other information about clients included in the group of settlements.

Cremades said the total amount for the settlements was derived from a survey of the 60 firms in 25 countries that make up the group, called the Global Alliance of Law Firms. The individual settlements can’t be independently verified, he said.

The banks, which weren’t identified, can be expected to try to recover some of the money they paid to settle clients’ claims from the bankruptcy estate of Madoff’s former firm, Cremades said.

“My view is, below Madoff, all of them were victims,” Cremades said.

Irving Picard, the New York lawyer who was appointed as the trustee overseeing the Madoff bankruptcy, didn’t immediately return an e-mail seeking comment on the Alliance claims.

French lawyers Jean-Pierre Martel and Olivier Metzner, who are involved in separate Madoff-related litigation, said they haven’t been informed of any settlements.

“No idea, but either way, my clients are not included,” said Martel, who represents French investors suing Zurich-based UBS in Paris.

“I haven’t heard of that,” said Metzner, who represents an unidentified French investor with a criminal complaint in Paris regarding the fate of his 2 million-euro ($2.47 million) investment.

Cremades & Calvo-Sotelo was one of the founders of a network of law firms from countries including France, the U.S., the U.K., Spain and Switzerland that agreed to pool resources in Madoff-fraud cases and act as a “coordinated pressure group.”

Lex Thielen, a Luxembourg lawyer who is part of the law firm coalition, said by e-mail today that he was travelling and not aware of the settlement.

-With assistance from Heather Smith in Paris

Latest Opinion Digests

See all digests

Top stories

See more news