Abu Dhabi’s Falcon sued over Madoff-linked funds

Julius Baer Group, the 121-year- old Swiss wealth manager, and Falcon Private Bank were sued by the trustee liquidating Bernard Madoff’s former investment firm, who is seeking to recover $76m in redemptions.

Irving Picard filed two lawsuits yesterday in US Bankruptcy Court in Manhattan for a return of funds that were transferred to the two Swiss banks by investors in Fairfield Sentry, a feeder fund for Madoff’s firm. The trustee seeks about $37m from Julius Baer and about $39m from Falcon, a Zurich-based private bank owned by the government of Abu Dhabi.

“We cannot comment on pending legal cases,” said Jan Vonder Muehll, a Zurich-based spokesman for Julius Baer, which manages 166 billion Swiss francs ($179bn) for private clients.

In 2010, the liquidators of the Fairfield funds started separate litigation against Julius Baer, according to the bank’s 2010 annual report. Baer has said it avoided direct losses from Madoff-related investments.

Madoff, who pleaded guilty to fraud charges, is serving 150 years in prison for the largest Ponzi scheme in US history. Investors lost about $19bn in principal, Picard has said.

Fairfield is in liquidation in the British Virgin Islands. Picard has filed similar lawsuits to recover investments taken out of Madoff’s firm before the fraud was exposed.

The scandal wiped $7bn from at least seven Geneva- based money managers, including Union Bancaire Privee, Banco Santander SA’s Optimal Investment Services, and Notz, Stucki & Cie.

Irene Franco, a spokeswoman for Falcon, said the firm hasn’t been informed about the Picard claim.

Falcon was the private banking unit of American International Group (AIG) before Aabar bought it in April 2009.