HSBC Holdings PLC Tuesday said it has agreed to pay $62.5 million to investors in a fund it serviced that lost money from the Bernard Madoff fraud, in what is thought to be the first settlement by a fund custodian involved in the massive Ponzi scheme.
In a regulatory filing, the bank said it reached a settlement with investors in Thema International Fund PLC who had brought a class action pending in the U.S. District Court for the Southern District of New York. It said the settlement, which needs court approval, shouldn't be construed as an admission of wrongdoing or liability.
HSBC, along with a host of other financial institutions, is involved in a series of legal actions for its role in funds that lost money in the fraud. Through an Ireland fund-services unit, HSBC was Thema's custodian and administrator, handling back-office functions such as calculating the fund's net asset value. The suits allege that HSBC knew or should have known about Madoff's fraud, and that it breached its duties to the funds and investors.