* Union Bancaire Privee hit with negligence suit
* UBP had offered to buy back Madoff investments at 50 pct (Updates with UBP statement)
NEW YORK, May 11 (Reuters) - Union Bancaire Privee (UBP), the private Swiss bank that offered to partially reimburse clients for their losses to swindler Bernard Madoff, has been sued for negligence in a U.S. court for losses in the fraud.
The lawsuit against the bank and asset management subsidiary executives, including the managing partner, chief investment officer and co-president, Roman Igolnikov, was filed on May 8 on behalf of New York investor Andrea Barron.
Barron made investments in UBP funds beginning in September 2004 and made no withdrawals, the lawsuit in Manhattan federal court said. The Geneva-based bank has admitted an overall exposure to Madoff of more than 1 billion Swiss francs.
“The complaint is without merit and UBP will defend it vigorously,” the bank said in a statement responding to the lawsuit, which seeks class-action status for damages and the return of fees earned by the bank.
In March, the bank offered to buy back its clients’ exposure to Madoff and Bernard L. Madoff Investment Securities LLC (BLMIS or BMIS) for 50 percent of the original cost.
UBP was one of the hardest-hit private banks following revelations in December of the decades-long global investment fraud of up to $65 billion by the former nonexecutive chairman of Nasdaq.
Madoff, 71, pleaded guilty in March. He is jailed awaiting sentencing in June and is expected to spend the rest of his life in prison.
“Defendants were grossly negligent and breached their fiduciary and other professional duties by failing to perform adequate due diligence into Madoff and BMIS, despite the existence of numerous red flags, including explicit warnings from UBP’s own research team,” the court document said.
The case is Andrea Barron v. Roman Igolnikov, Union Bancaire Privee, Union Bancaire Privee Asset Management LLC et al 09-4471 in U.S. District Court for the Southern District of New York (Manhattan) (Reporting by Grant McCool; Editing by Andre Grenon and Brian Moss)
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