Deminor has taken notice of a settlement reached between HSBC and an investor in Thema International Fund PLC (the Fund), a UCITS fund incorporated pursuant to the laws of Ireland. The assets of the Fund had been entrusted entirely in management and custody to Bernard Madoff Investment Securities LLC (BMIS). The investor had sued HSBC in its capacity as custodian of the Fund before the courts of Dublin. The settlement was reached one day after the case had gone on trial.
To Deminor's knowledge, it is the very first time that a custodian bank compensates directly an investor for the losses suffered on an investment in a Madoff "feeder fund" set up and distributed in Europe pursuant to UCITS legislation.
Deminor believes that this settlement is an important development in the recovery process for investors in UCITS Madoff "feeder-funds" established in Ireland or Luxembourg. Even though the terms of the settlement are not known, it shows that a custodian bank has been willing to compensate the true victims of the Madoff fraud, i.e. the final investors. It also shows that individual investors need to file their own claims for damages and not solely rely on the actions of the "feeder funds" themselves and/or the U.S. Trustee Irvin Picard.
Following this development and subject to further analysis, Deminor is in the process of reviewing options for all interested Thema International investors who had contacted Deminor since the beginning of the Madoff case.
Deminor reminds that hundreds of investors who filed similar lawsuits before the Luxembourg courts since 2008 have been deprived of their basic right to seek compensation directly from the custodian banks despite the fact that the UCITS directive and Luxembourg law provide for a direct action against such banks. The Thema settlement shows that investors are able to reach settlements provided the courts give them proper access to justice.
Contact person: Erik Bomans, +32/2.674.71.10, erik.bomans@deminor.com
