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HSBC Settles Thema Fund’s Suit Over Madoff-Linked Losses

Thema International Fund Plc and HSBC Holdings Plc (HSBA) settled a lawsuit over the London-based bank’s liability for the fund’s losses of about $1.1 billion through Bernard Madoff’s Ponzi scheme. HSBC and Thema said the deal, for an undisclosed amount, doesn’t include an “admission of liability on the part of any party.” The settlement needs to be approved by Thema shareholders, who are expected to meet in July for that purpose, the parties said in a joint statement today. “Thema believes that it has a strong case but the settlement provides certainty and an early recovery, avoiding further years of expensive litigation,” according to the statement. HSBC said “it has good defenses but recognizes the risks and uncertainties inherent in defending a complex UCITS claim of this nature together with the significant burden and expense involved in doing so.” More on Bloomberg [...]

The High Cost Of Mounting A White-Collar Criminal Defense

It was estimated that Raj Rajaratnam spent over $40 million to defend himself against charges of insider trading, argue a 9-week trial and wait for 6 days of jury deliberations …. oh, and now there’s the ongoing appeal. Raj, a billionaire, can certainly afford it but he’s probably not happy to be sitting in a federal prison near Boston despite his investment in his legal defense. Rajat Gupta, who is currently having his legal fees paid by Goldman Sachs (former Board Member), has spent over $30 million in legal fees. Gupta was also found guilty and was sentenced to 2-years in prison …. he is free pending appeal. Another high-profile case was that of Bill Ruehle, CFO at BroadCom, who successfully defended himself on charges that he backdated stock options. Ruehle told me in an interview that the legal tab, paid for by BroadCom, was in the tens of millions of dollars. So what does it cost mere mortals to defend themselves when the Feds come knocking? A lot. If you have been diagnosed with a rare, potentially life-threatening disease, what kind of doctor would you get? The answer is, “The best money can buy!” The stakes are just as high for white-collar criminal charges, which can put a defendant in prison for life. More in Forbes [...]

ALERT:

Tonight at 10PM (EST) CNBC’s American Greed will be airing an episode examining the experiences of victims of the longest running ponzi scheme in history, perpetrated by Mr. Phil Barry, also known as The Brookyn Madoff. [...]

Ex-Madoff Employees Lose Bid for Separate Criminal Trials

Five ex-employees of Bernard L. Madoff Investment Securities LLC lost a bid to be tried separately on criminal charges connected to their work for the confidence man. U.S. District Judge Laura Taylor Swain in Manhattan today denied requests that she hold separate trials of the defendants or split off some of the charges from a trial scheduled to begin Oct. 7. Swain today granted some requests by the defense for pretrial production of evidence by U.S. prosecutors. More on Bloomberg [...]

Court OK’s lawsuit against KPMG in Madoff fraud

A group of investors can sue the audit firm KPMG for its role in certifying the financial statements of two hedge funds that invested their money with Bernard Madoff, an appeals court has affirmed. In a decision last week, the Massachusetts Appeals Court ruled that 26 investors who lost a collective $20 million in the Madoff fraud may proceed in their lawsuit against KPMG. In their case, originally filed in 2010, the plaintiffs allege the giant firm did not adequately perform its audit and tax functions, failing to bring to light red flags that might have alerted them to the scheme. KPMG, based in New York, had argued that the investors should be subject to arbitration, a private proceeding, rather than suing in open court. But the appeals court agreed with a lower ruling that the investors were not bound by any arbitration agreements. More in The Boston Globe [...]

HSBC Settles Thema Fund’s Suit Over Madoff-Linked Losses

Thema International Fund Plc and HSBC Holdings Plc (HSBA) settled a lawsuit over the London-based bank’s liability for the fund’s losses of about $1.1 billion through Bernard Madoff’s Ponzi scheme. HSBC and Thema said the deal, for an undisclosed amount, doesn’t include an “admission of liability on the part of any party.” The settlement needs to be approved by Thema shareholders, who are expected to meet in July for that purpose, the parties said in a joint statement today. “Thema believes that it has a strong case but the settlement provides certainty and an early recovery, avoiding further years of expensive litigation,” according to the statement. HSBC said “it has good defenses but recognizes the risks and uncertainties inherent in defending a complex UCITS claim of this nature together with the significant burden and expense involved in doing so.” More on Bloomberg [...]

CNBC’s “American Greed 77″ Will Premiere on May 30th

On May 30 at 10PM (EST) CNBC’s American Greed will be airing an episode examining the experiences of victims of the longest running ponzi scheme in history, perpetrated by Mr. Phil Barry, also known as The Brookyn Madoff. [...]

Regulator for the World

Imagine if a Bush Administration official had insisted that U.S. law must reign supreme in every country where a U.S. bank does business. That’s essentially the position of Chairman Gary Gensler of the Commodity Futures Trading Commission (CFTC). And despite a world-wide backlash, the U.S. press corps is giving him an ovation. Meanwhile, new Securities and Exchange Commission Chairman Mary Jo White is receiving a Bronx cheer for suggesting that foreign financial regulators ought to have some say over what happens inside their borders. More in the Wall Street Journal [...]

For Sale: A Madoff Home With a Pool, and Shadows

The lush white mansion for sale at 34 Pheasant Run in Old Westbury on Long Island makes a grand first impression. It has a long, winding driveway; a tennis court; a two-bedroom pool house surrounded by lavish gardens; a parade of antiques in its hallways; and marble in hues of lapis and gold throughout the ground floor. In many ways, the house is quite beautiful. But it is also a place full of shadows, a haunting just visible in its empty silver picture frames and in the red, white and blue signs that hang on every door: “United States Marshal,” the signs say. “No Trespassing.” The shadow behind all that opulence is other people’s money. This was one of the residences of Peter B. Madoff, chief compliance officer at the firm owned by his older brother, Bernard L. Madoff. More in the New York Times [...]

Allen Stanford’s valuables go up for auction

DALLAS, TX – You can’t take your stuff with you to the grave. While R. Allen Stanford isn’t six feet under, he certainly isn’t using his multiple mansions worth of expensive crap while serving his 110 year prison sentence. Stanford was locked up last year for frauding $7 billion from people in a massive Ponzi scheme, and auctioneers are still chipping away at his property. More on News Fix [...]