HSBC continued to act for funds that fed money into Bernard Madoff’s Ponzi scheme in spite of repeated warning from the bank’s own executives and outside auditors about the “baffling” and potentially fraudulent structure of the scheme, according to a US lawsuit launched against the global bank.
In the $9bn claim against HSBC and other European institutions, the trustee charged with recovering money for Mr Madoff’s victims alleged the warnings began as early as 2001, seven years before the scheme collapsed revealing one of the biggest frauds in history.
The lawsuit also alleges that Madoff sent HSBC-connected funds account statements that included extraordinary discrepancies, yet the bank’s subsidiaries continued to serve as administrators, custodians and marketers for feeder funds that sent money to the $65bn Ponzi scheme, the complaint said.