Following 16 years of litigation, the Principal Liquidators of Herald Fund SPC (in Official Liquidation), Russell Smith and Niall Goodsir-Cullen of international accounting firm BDO, welcome the decision by Luxembourg's highest appellate court, the Court of Cassation, to uphold the Court of Appeal's decision that HSBC Securities Services (Luxembourg) S.A. must give restitution by equivalent in cash of the securities that it confirmed it held as custodian for Herald prior to the collapse of Bernard L Madoff Investment Securities LLC in 2008.
The Principal Liquidators of Herald consider that there cannot be any effective further appeal regarding the restitution of the securities and look forward to the Court of Appeal's quantification of the sums to be paid to Herald, as well as the separate progression before the Luxembourg District Court of Herald's claim for restitution of approximately $500m in cash. The Principal Liquidators note that HSBC Holdings Plc has belatedly made provision in in its consolidated financial statements for Herald's claims in the sum of US$1.1bn, while itself acknowledging that the eventual financial impact of the claims could be "significantly different". That is an important qualification, and the Principal Liquidators consider that US$1.1bn is likely to be materially insufficient for the required restitution.
Global News Coverage and International News
The Principal Liquidators of Herald consider that there cannot be any effective further appeal regarding the restitution of the securities and look forward to the Court of Appeal's quantification of the sums to be paid to Herald, as well as the separate progression before the Luxembourg District Court of Herald's claim for restitution of approximately $500m in cash. The Principal Liquidators note that HSBC Holdings Plc has belatedly made provision in in its consolidated financial statements for Herald's claims in the sum of US$1.1bn, while itself acknowledging that the eventual financial impact of the claims could be "significantly different". That is an important qualification, and the Principal Liquidators consider that US$1.1bn is likely to be materially insufficient for the required restitution.
Global News Coverage and International News
- The Business Times - HSBC expecting US$1.1b hit from Bernard Madoff Ponzi scheme
- Reuters - HSBC to take $1.1 billion hit after court ruling in Madoff case
- CNBC - HSBC to set aside $1.1 billion in third quarter for potential hit from Madoff case
- Financial Times - HSBC expects $1.1bn hit from legal fight over Madoff’s Ponzi scheme
- Wall Street Journal - HSBC Braces for $1.1 Billion Hit From Madoff Lawsuit
- Bloomberg - HSBC Takes $1.1 Billion Hitt on Madoff Fraud Litigation
- Luxembourg Times - HSBC takes €946m hit on Madoff fraud litigation
- The Times - HSBC sets aside $1 billion for Madoff damages claim
- The Telegraph - HSBC faces $1bn hit from Bernie Madoff Ponzi scheme tussle
- South China Morning Post - HSBC to set aside US$1.1 billion for potential payouts in Madoff fraud lawsuits
- The Independent - HSBC takes £826m hit after Madoff fraud ruling
- Times of India - Madoff's investment fraud: HSBC books $1.1 billion provision; shares dip
BDO invites enquiries regarding resources and other ways our firm can provide assistance with such matters to Russell Smith (RSmith@bdo.ky) or Sue Fletcher (SFletcher@bdo.ky).
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