UBS faces lawsuits over $1.4 bn Madoff-linked fund

GENEVA: French financial company Oddo & Cie said on Tuesday it is suing Swiss bank UBS AG to recover euro30 million ($39.8 million) invested in a fund linked to US financier Bernard Madoff.

Oddo spokesman Arnaud Ploix said his firm sold its clients' shares in the Luxembourg-based LuxAlpha fund on Nov. 4 but never received the money from UBS, which at the time was the fund's designated custodian.

Meanwhile, a law firm in Switzerland says it too is considering suing the bank over its management of the $1.4 billion fund.

Marc Hassberger of Geneva-based Chabrier & Associes said three of his clients invested several million dollars in LuxAlpha.

``Under Luxembourg law it seems custodian banks have some form of responsibility to make sure the underlying assets are correctly allocated,'' he said.

``We'll have to define whether or not they met those responsibilities. My first instinct is that they may have failed.''

UBS spokeswoman Tatiana Togni declined to comment on either case, but said that Switzerland's largest bank had established the LuxAlpha fund at its clients' request.

The bank managed the fund until mid-November, before handing the management over to Access International Advisors.

Rene-Thierry Magon de la Villehuchet, the founder of Access International, committed suicide on Dec. 23 in his New York office after losing considerable amounts of his own and his clients' money that had been invested with Madoff.

Madoff, a former chairman of the Nasdaq stock market, was arrested Dec. 11 and allegedly told FBI agents he had masterminded a $50 billion fraud by paying dividends to existing investors from funds deposited by new clients.