Madoff Trustee Sues HSBC

MANHATTAN (CN) - The trustee seeking recovery for victims of Bernard Madoff's $70 billion Ponzi scheme demands $9 billion from HSBC bank, which trustee Irving Picard claims "look[ed] the other way" and "pretend[ed] they were ensuring the existence of assets and trades when, in fact, they did no such thing."

Picard's latest complaint accuses HSBC and a slew of co-defendants of supporting a network of feeder funds that helped Madoff sustain his giant scam.

The trustee claims that HSBC twice hired KPMG to take a look at Madoff's firm, and both time KPMG reported "serious risks already known to HSBC," Reuters reported this morning.

Picard sued JPMorgan Chase & Co. for $6.4 billion last week, and has asked for $2 billion from Swiss bank UBS.

The raft of filings is coming now because Picard must file such lawsuits for recovery within 2 years after Madoff and his firm filed for bankruptcy, which was on Dec. 11, 2008.

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