HSBC, Herald Sued Over $578 Million ‘Fake’ Profit From Madoff

The lawsuit, filed yesterday by trustee Irving Picard in U.S. Bankruptcy Court in Manhattan, claims London-based HSBC withdrew most of the money on behalf of its client, Herald Fund Spc, less than 90 days before Madoff’s firm began liquidating. Picard says such transfers are recoverable under U.S. bankruptcy law.

The so-called clawback lawsuit against HSBC and Herald is one of at least eight filed against the biggest investors in York-based Bernard L. Madoff Investment Securities LLC. The earlier complaints seek a total of $13.7 billion in damages to be used to repay victims of Madoff’s fraud.