UBS is being sued for more than $2bn (£1.3bn) amid claims it hid fraudster Bernard Madoff's Ponzi scheme while it lost his clients billions.
US lawyer Irving Picard, who is acting as trustee for Madoff's victims, has lodged the case against UBS and associates at a bankruptcy court, the BBC reports.
The bank, which has made no comment on the charges, earned fees for promoting and administering Madoff's funds.
Madoff claimed high and stable returns for his investment fund over many years, when it was returning only a fraction.
He relied on "feeder funds" - such as those managed by UBS - to attract new investor money which he used to pay out the bogus returns to existing investors.
Madoff, who was exposed in 2008 and sentenced to 150 years in prison, could not have accomplished his scheme unless UBS had agreed to "look the other way", the lawyers say.
"Not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did," says David Sheehan, a lawyer acting on behalf of Picard.
The lawsuit claims UBS and its co-defendents made $80m in fees from their work with Madoff.
UBS "chose to enable Madoff's fraud for their own gain", claimed the trustee, and the bank's involvement gave the fraudster "an aura of legitimacy".
Picard has filed at least 19 other lawsuits against other feeder funds, and is seeking to recover $17.5bn in total, including the money claimed from UBS.
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