Guernsey-based Bramdean Alternatives is facing proposed legal action over Bernard Madoff's $50bn pyramid investment scandal, The Times reports.
Madoff was arrested in December after allegedly confessing to running a 'Ponzi', or pyramid scheme. Prosecutors say he was paying returns to existing investors using funds provided by new investors. He faces 20 years in prison if convicted.
Bramdean, which is run by hedge fund veteran Nicola Horlick, as well as HSBC, UBS and Barclays, could be sued by law firm Edwin Coe on behalf of ten wealthy UK investors who have sustained a combined loss of £87m.
The law firm will investigate suing bankers, fund managers and other intermediaries for the full value of the money lost in the Madoff collapse.
"It seems clear that many advisers were either promoting schemes that were flawed or were failing to advise clients on the extent of the risks in many of these schemes," says David Greene, head of litigation at Edwin Coe.
The ten clients will make a decision in the coming weeks over whether they will launch action in Britain or join similar action in America, he says.
Bramdean Alternative investment trust recently said it will write off approximately £12.4m invested in two hedge funds run by Madoff resulting in the firm's net asset value plunging by almost 10%.
Horlick launched a scathing attack on US financial regulators in December calling the alleged swindle a 'systematic failure' of the US financial watch dog.
Santander is the first firm to offer compensation for Madoff losses and will repay the original investments of individual customers, totaling approximately €1.38bn.
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Via The Exchange
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