(Bloomberg News) HSBC Holdings Plc can join JPMorgan Chase & Co. and UBS AG in appeals of decisions dismissing most of the lawsuits brought by the trustee liquidating Bernard L. Madoff Investment Securities Inc., a judge ruled.
U.S. District Judge Jed Rakoff in July dismissed most of the Madoff trustee's $9 billion suit against London-based HSBC. In November, U.S. District Judge Colleen McMahon threw out most of the trustee's $19 billion suit against New York-based JPMorgan and dismissed most of the suit against UBS.
The two judges ruled on the same grounds, accepting the banks' arguments that the claims underlying the trustee's suits could only be brought by individual Madoff creditors.
Irving Picard, the Madoff trustee, couldn't appeal immediately because neither judge dismissed all of the suits. To lift the bar to appeal, McMahon previously entered a final judgment in the JPMorgan case, allowing Picard to seek a review by a U.S. Court of Appeals.
Yesterday, at the request of HSBC, Rakoff did the same by entering a final dismissal judgment so Picard can appeal. HSBC said it wanted to have its case heard at the same time as JPMorgan's.
The HSBC case lacked "factors that might lead the court to deny such relief" in Picard's suit against New York Mets owners Fred Wilpon and Saul Katz, Rakoff said. In September, Rakoff knocked out about $700 million of the $1 billion in claims in the Wilpon case and scheduled a jury trial for March.
Rakoff said he is still considering whether to allow Picard to appeal his decision that the trustee can only sue to recover fictitious profits that customers took out within two years of the Madoff firm's bankruptcy. Picard sought to go back six years in disgorging bogus profits from the Ponzi scheme.
Picard argued in court papers that Rakoff should allow an immediate appeal because another district judge disagreed with Rakoff's conclusion that suits can only look back two years. Until the question on timing is resolved, hundreds of suits by the trustee against customers are in limbo.
The HSBC suit in U.S. District Court is Picard v. HSBC Bank Plc, 11-763, U.S. District Court, Southern District of New York (Manhattan). The UBS suit in district court is Picard v. UBS AG, 11-04213, in the same court. The JPMorgan lawsuit in district court is Picard v. JPMorgan Chase & Co., 11-00913, in the same court. The JPMorgan lawsuit in bankruptcy court was Picard v. JPMorgan Chase & Co., 10-04932, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The Wilpon suit in district court is Picard v. Katz, 11-03605, U.S. District Court, Southern District New York (Manhattan).
The Madoff liquidation case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities Inc., 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The criminal case is U.S. v. Madoff, 09- cr-00213, U.S. District Court, Southern District of New York (Manhattan).