* Trustee accuses JPMorgan, HSBC and other banks of aiding
* Asks appeals court to reinstate $30 billion in claims
* Defends authority to pursue claims for victims
By Terry Baynes
Feb 16 The trustee seeking money for
Bernard Madoff's victims filed two appeals on Thursday to
reverse judges' rulings that wiped out around $30 billion of his
claims against banks including JPMorgan Chase & Co and
HSBC Holdings Plc.
U.S. District Judge Colleen McMahon of Manhattan in November
took away all but $425 million of trustee Irving Picard's $19.9
billion lawsuit against JPMorgan, Madoff's main bank for two
decades. Her colleague, Judge Jed Rakoff, in July dismissed $8.6
billion of Picard's claims against HSBC and Italy's UniCredit
Both judges found that Picard, a trustee for the estate of
Bernard L. Madoff Investment Securities LLC, lacked the power to
bring numerous claims against the banks for violating their duty
to detect the fraud. Rather, the claims belong to the victims
themselves, the judges ruled.
In two briefs filed with the U.S. Court of Appeals for the
2nd Circuit, Picard said that the judges were wrong to prevent
him from seeking damages from banks he believes aided or abetted
Madoff in his fraud.
He argued that case law, the U.S. Bankruptcy Code, New York
law and sound public policy give him the authority to pursue
claims against the banks on behalf of customers.
JPMorgan, HSBC and UniCredit did not immediately respond to
requests for comment.
The banks have argued that, while the law allows Picard to
sue to recover investors' property, the trustee had no right to
pursue fraud claims against them, because such claims could be
brought only by the victims of a fraud.
Madoff is currently serving a 150-year prison term.
The rulings by McMahon and Rakoff dismissed roughly
one-third of Picard's more than $103 billion of asserted claims
against banks and other defendants.
The cases before the 2nd Circuit are Picard v. HSBC Bank Plc
et al, No. 11-5175 and Picard v. JPMorgan Chase & Co et al, No.