Investment fund company files lawsuit against Ernst & Young, UBS
by AccountingWEB on
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.
You may like these other stories...
Revenue accounting could hit loans, bonusesWith the new accounting guidelines for revenue recognition expected to be issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board...
A new online pension implementation toolkit from the Governmental Accounting Standards Board (GASB) supplies preparers, auditors, and users of state and local governmental financial reports with numerous resources on pension...
State corporate income taxes edge higher, some states stand outEmily Chasan, senior editor for the Wall Street Journal’s CFO Journal, reported yesterday that state corporate income tax revenue rose 5.5 percent in the...
Upcoming CPE Webinars
BAR is an acronym for: Boundaries, Authority and Role. This simple tool will provide participants with a solid understanding of leadership essentials to improve their performance.
This material is designed to provide a start-to-finish overview of how to plan and complete high-quality small audits efficiently.
In this session Excel expert David H. Ringstrom, CPA shares numerous techniques that you can use to work with charts more efficiently.
Key Accounting and Reporting Issues for Nonprofits No. 1: Overview and Statement of Financial Position
This material focuses on non-profit organizations organization, accounting and reporting.