Molitor Fisch & Associés on Madoff Case in Luxembourg

Since the beginning of 2009 Molitor Fisch & Associés has been involved in several legal proceedings related to the Bernard Madoff Investment Securities (BLMIS) affair on Luxembourg market.

Molitor Fisch & Associés has been representing major French law firms and their clients in various legal actions against the Luxembourg based SICAV companies and their respective custodian bank.

Our legal advice included: the analysis and interpretation of Luxembourg laws on investment funds, contacts with the local supervisory body for the financial sector, legal opinion on the potential impact of the SICAV’s liquidation on the investors’ situation, and the initiating of a court proceedings to get a formal access to the SICAV’s documentation and files.

In the same context Molitor Fisch & Associés has been representing a number of Swiss and UK law firms whose clients had invested in certain non-Luxembourgish investment funds which are administered by banks in Luxembourg.

For more information on the Madoff case and related legal developments in Luxembourg please read the Madoff Case update below:

I - Positions of the Commission for the Supervision of the Financial Sector, Regulatory Authority in Luxembourg (Commission de Surveillance du Secteur Financier or CSSF):

• The CSSF stated that UBSL had now delivered evidence and guarantees for having the required infrastructure and the relevant rules of its internal organisation in place, in line with the injunction imposed on it and in compliance with professional standards applicable in the Grand Duchy of Luxembourg.
  
  Besides, the CSSF reminds that the bank's responsibility is not affected by the fact that it has entrusted to a third party all or some of Undertakings for Collective Investment's assets in the bank’s safe-keeping.
  Press release of May 27, 2009
  
  
• The CSSF reminds that according to the Law on transparency requirements for issuers of securities the annual financial reports must include the statements by the persons responsible within the issuer.
  Press release of April 22, 2009
  
  
• The CSSF decide to withdraw the Luxembourg Investment Fund SICAV from the official list and to apply for the judicial winding-up of this fund.
  Press release of March 3, 2009
  
  
• The CSSF orders UBSL to implement the necessary infrastructure, i.e. sufficient human and technical means and the necessary internal rules in order to carry out all the tasks relating to its function of depositary bank of a Luxembourg undertaking for collective investment. Further, the CSSF remembers again the obligations of a depositary bank in Luxembourg law.
  Press release of February 25, 2009
  
  
• The CSSF decide to withdraw Herald (Lux) SICAV from the official list and to apply for the judicial winding-up of this fund.
  Press release of February 11, 2009
  
  
• The CSSF and UBS have met on the 5th February 2009 to discuss on the situation of Luxalpha SICAV – American Selection and of Luxembourg Investment Fund - US Equity Plus regarding the Madoff case.
  Press release of February 6, 2009
  
  
• The CSSF decide to withdraw Luxalpha SICAV from the official list and to apply for the judicial winding-up of this fund.
  Press release of February 3, 2009
  
  
• The CSSF informs of the suspension of some funds of Luxembourg law.
  Press release of January 23, 2009
  
  
• The CSSF remembers that « when a fund's assets are deposited by the depositary bank with a third party, these deposits are under the monitoring and supervisory responsibility of the depositary bank, implying that the latter must know at all times in which manner the assets are invested and where and how these assets are available. This responsibility is not affected by the fact that the depositary has entrusted to a third party all or part of the assets in its safe-keeping ».
  Press release of January 2, 2009
  

II - Judicial Decisions:

• The 6th Chamber of the Luxembourg District Court declared the dissolution of the Luxembourg Investment Fund SICAV, on the 30th April, 2009.
  
  
• The 6th Chamber of the Luxembourg District Court (VIème Chambre du Tribunal d'Arrondissement de et à Luxembourg) delivered two judgments on 2nd April 2009 (jugement commercial VI No. 506/2009 and 507/2009) which declare the dissolution of Herald (Lux) SICAV and respectively of Luxalpha SICAV and which order the winding-up of this two SICAVs.
  

III - Liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS):

• Appointment of a receiver (Lee S. Richards) over Bernard L. Madoff Investment Securities LLC, Madoff Securities International Ltd., and Madoff Ltd. on 12th December 2008.
  
  
• Appointment of a trustee (Irving H. Picard) for the liquidation of Bernard L. Madoff Investment Securities LLC on 15th December 2008.
  Madoff Trustee Site
  
  
• The Trustee announced over $116 million in commitments made to Madoff claimants.
  Press release of May 26, 2009
  
  
• The Trustee announced a settlement with two funds managed by Optimal Investment Services SA, which agreed to pay $235,000,000.00 to settle potential legal claims by the Trustee.
  Press release of May 26, 2009
  
  
• The Trustee announced on 24th June 2009 the filing of a complaint in the United States Bankruptcy Court against Cohmad Securities Corporation and a number of its principals.
  Press release of June 22, 2009
  
  
• The Trustee announced on 1st July 2009 a total of $231 million in Securities Investor Protection Corporation (SIPC) committed in the determination of 543 claims submitted by BLMIS.
  http://www.madofftrustee.com/press/070109_SIPC_Trustee_news_release.pdf
  
  
• First Interim Report of the Trustee dated on 9th July 2009
  http://www.madofftrustee.com/press/TrusteeInterimReport_090709.pdf

IV - Criminal proceedings against Bernard L. Madoff:

• Arrest of Bernard L. Madoff, on December 11th, 2008.
  
  
• Criminal Information charged Bernard L. Madoff with eleven felony charges (securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission, and theft from an employee benefit plan) on March 10, 2009.
  
  
• Bernard L. Madoff pleaded guilty to all eleven counts in the Information on March 12, 2009.
  
  
• United States v. Bernard L. Madoff has been assigned to United States District Judge Denny Chin.
  
  
• US Department of Justice, Southern District of New York
  http://www.usdoj.gov/usao/nys/madoff.html
  
  
• The Government delivered its sentencing memorandum on 26th June, 2009.
  http://www.usdoj.gov/usao/nys/madoff/20090626sentencingmemorandumfiled.pdf
  
  
• Bernard L. Madoff is sentenced to 150 years of imprisonment by the District Court of the Southern District of New York on 29th June 2009.
  http://www.usdoj.gov/usao/nys/madoff/20090629sentencingtranscriptcorrected.pdf