HSBC Holdings Plc
The British bank said the revised settlement for investors, in Thema International Fund Plc, addresses issues raised by U.S. District Judge Richard Berman in Manhattan, who on September 7 called the original accord not fair, reasonable or adequate.
Berman said that accord had several obvious deficiencies, including inadequate disclosure of legal costs and the setting aside of a $10 million reserve for legal fees and expenses for investors to pursue claims against non-settling defendants outside the United States.
HSBC had acted as a custodian to the Thema fund, and provided administration and other services. It has estimated that Thema investors lost about $312 million, and that various funds that the bank serviced transferred a net $4.3 billion to Madoff's firm during the period it serviced those funds.
According to the revised settlement, the total payout to investors would range from $52.5 million to $62.5 million, depending on how many investors choose not to join the accord.
Lawyers for the investors will seek court approval for fees equal to 18 percent of the gross settlement fund.
Frank Bottini, a lawyer for lead plaintiff Neville Seymour Davis, did not immediately respond on Monday to requests for comment.
HSBC was sued in January 2009, one month after Madoff's fraud was uncovered.
Irving Picard, the trustee seeking money for Madoff victims, accused HSBC in a separate lawsuit of ignoring red flags about Madoff's fraud.
A different federal judge, Jed Rakoff, in July threw out much of his case, saying the trustee lacked authority to bring about $6.6 billion of claims.
Madoff, 73, pleaded guilty to running his Ponzi scheme in March 2009 and is serving a 150-year prison sentence.
The case is In re: Herald, Primeo, and Thema Securities Litigation, U.S. District Court, Southern District of New York, No. 09-00289.
(Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky)