The specter of Bernie Madoff still hangs over Swiss banks 12 years after his Ponzi scheme collapsed. An American liquidator is looking for massive sums from 15 Swiss banks.
Even Swiss exchange operator SIX pops up on the list that Krys Global, a Cayman Islands firm specialized in liquidations and resolving disputes linked to fraud, according to Swiss outlet «Bilan» (article not available online).
But the main target of Kenneth Krys, who runs the company, are Swiss banks. Madoff's victims are claiming damages from UBS, Credit Suisse, Pictet, Lombard Odier, Mirabaud, Bordier. Julius Baer and Vontobel list the Madoff case as an open issue in their annual reports.
Billions – Plus Interest
«Bilan» cites U.S. court filings showing that claims against ING (Switzerland), which Julius Baer bought in 2009, EFG in Luxembourg, Royal Bank of Canada (Suisse), Dexia private bank (Switzerland), SCS Alliance (now part of Compagnie Bancaire Helvétique), and Barclays (Switzerland) are still outstanding.
In total, Krys Global is seeking funds from 69 financial firms worldwide. The case is being heard by a bankruptcy judge in New York's Southern District. The sum Krys is seeking? Around $6 billion plus interest, of which $2.5 billion plus interest from Swiss firms,» he told «Bilan».
Average $160 Mln Claim
The funds were previously lodged in three British Virgin Islands-based funds: Fairfield Sentry, Fairfield Sigma, and Fairfield Lambda. Switzerland's financial center played a key role in Madoff's Ponzi scheme, as a series of private banks and asset managers kissed off several hundred million due to the scandal.
«Bilan» highlights the massive disconnect between Krys' claims to Swiss banks, and what the lenders themselves expect. The outlet calculated that each institute would owe Krys' clients roughly $160 million.
Discrepancy Of Views
Most are budgeting considerably less: Vontobel, for example, views 44.1 million Swiss francs ($50 million) as the maximum it may have to pay. The Zurich-based bank views the liquidator's chances of prevailing in court as so slim that it hasn't actually stowed any provisions against the eventuality.
Julius Baer had factored in 64 million francs and Pictet 50 million francs, according to «Bilan». UBS and Credit Suisse no longer list the case in their pending litigation disclosures. Contacted by the outlet, the banks argued that they had merely been custody banks for Madoff money, but not offered his funds nor recommended his vehicles to their clients.
