Madoff case in US seeks evidence from Irish-based bank employee

Bernard Madoff

A group of investors who have brought proceedings in the US courts over losses they claimed were caused following the collapse of Bernard Madoff's investment companies have obtained permission of the High Court to have an Irish bank employee give evidence in their action.

A court in New York was today granted permission to take evidence from a witness in a case brought over the alleged negligent operation and management of Optimal Strategic US Equity Ltd Fund, which is based in the Bahamas.

The investors claim their money was invested by the fund with disgraced former New York NASDAQ Stock Exchange chairman Bernard Madoff's firm Bernard L Madoff Investment Services LLC (BMIS).

Their money disappeared after Madoff was exposed as running a Ponzi scheme.

Today at the High Court in Dublin Mr Justice Michael Peart granted orders allowing lawyers involved in the US proceedings take evidence from Mr David Nolan, the Head of the Investor Services Department of HSBC Securities Services Ireland Ltd, Grand Canal Square, Grand Canal Harbour Dublin.

It is claimed in the US action that HSBC Securities Services Ireland Ltd served as the administrators of the Optima US fund.

As they claim Mr Nolan may be the most knowledgeable person in this regard lawyers asked the High Court for an order allowing him give oral testimony.

Seeking the order Patrick O'Reilly Bl said the New York proceedings form part of a proposed class action taken by the investors against Spanish banking group Banco Santander, Optimal Investment Services and Mr Jonathan Clark.

They claim the Optimal fund was created, controlled an managed by Banco Santander, that Optimal Investment Services served as Optimal's investment manager and that Mr Clark was an employee of Optimal Investment Services.

The investors claim they purchased shares in Optimal. However they allege their money was invested with the Madoff's owned (BMIS).

When Madoff's Ponzi scheme was publicly revealed in late 2008 the extensive assets in Optimal vanished and the fund collapsed.

The investors, who hail from places such as Israel, Panama the Channel Islands as well as the US, claim the defendants failed to perform due diligence on Madoff and BMIS causing them loss, despite making representations to the contrary and charging full management fees of millions of US dollars per year.

They further allege the defendants committed fraud, breached their fiduciary duty, gross negligence, unjust enrichment and negligence misrepresentation.

The defendants deny all the claims against them.

Counsel said it is intended that Mr Nolan be examined before Ms Eileen Barrington SC at a date in April.

Yesterday's application, which was granted on an ex-parte basis, was adjourned to a date at the end of March.

  • Click to stay connected with more stories like this
  • Sign up here to receive news by email. Once per day, no spam.

Most Read in World