Investment fund company files lawsuit against Ernst & Young, UBS

Administrators of an investment fund associated with fraudster Bernard Madoff are suing Ernst & Young LLP and Switzerland's biggest bank, UBS AG.
“We filed the lawsuit today seeking the return of some $426 million,” Alain Rukavina, one of the liquidators for Luxembourg Investment Fund, told Bloomberg News on March 22.
UBS AG was the Luxembourg Investment Fund's custodian bank, and Ernst & Young's local unit was the auditor. The fund dissolved after Madoff's investment firm collapsed following his December 2008 arrest. A Luxembourg court in early March gave liquidators for local funds the “exclusive” right to recover assets, Bloomberg reported. The move was seen as potentially preventing hundreds of lawsuits by investors.
Rukavina also sued UBS and Ernst & Young in December over Access International Advisors LLC's LuxAlpha Sicav-American Selection Fund. UBS also was custodian for LuxAlpha, which once had $1.4 billion. UBS was responsible for oversight of funds and investor payments and deposits, but failed to prevent assets from being handed over to a third party, or sub-custodian, Bernard L. Madoff Investment Securities Inc., court papers state.
Rukavina said the Luxembourg Investment Fund was "more of a pure UBS product" than LuxAlpha, the Financial Times reported. A spokeswoman for UBS said that the Luxembourg Investment Fund suit “was entirely expected.” UBS has denied wrongdoing.
In addition, 80 French investors sued UBS on March 16 in Paris for failing to state in the LuxAlpha prospectus that Madoff handled the assets.
Even though the Luxembourg commercial court already has rejected claims by individual investors, directing claims to go through liquidators, French lawyers are confident, Investment International reported. “Given how the case evolved in Luxembourg, we have been in contact with other lawyers. As well as civil claims, we might, where possible, bring criminal complaints,” said Marc-Pierre Stehlin of the law firm Stehlin & Associes.
Madoff pleaded guilty last year to a Ponzi scheme in which money from new clients was used to pay earlier investors. He was sentenced to 150 years in prison.
Related articles:

You may like these other stories...

Accountants who specialize in forensic and valuation services point to electronic data analysis, or big data, as the most pressing issue they’ll face in the coming months, according to results of a new survey released...
Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...
Your 15-year-old may be tech-savvy enough to debug your computer, back-up data on your mobile devices, and help you stream episodes of Game of Thrones, but chances are you can’t expect them to display the same level of...

Upcoming CPE Webinars

Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.