British investors want law firm to sue for losses in Madoff ‘scam’

Law firm Edwin Coe has been approached by 10 wealthy British investors that have lost money in Bernard Madoff’s alleged “Ponzi” fraud.

The group wants to sue bankers, fund managers and other investment advisers for losses linked to the disgraced New York financier.

If successful, the suits could result in a wave of claims on directors’ and officers’ (D&O) and errors and omissions (E&O) insurance.

According to UK reports, the law firm will take action against HSBC, UBS, Barclays and Nicola Horlick’s asset management firm, Bramdean Asset Management.

HSBC would not comment on the litigation, but a spokesman said: “In the UK, HSBC did not give advice to clients to invest in the Madoff feeders.”

HSBC would not confirm whether it had D&O or E&O insurance, but admitted that it had provided financing to a smaller number of institutional clients who invested with Madoff. It said potential exposure under these financing transactions was about $10bn (£7.06bn). It also said custody clients had invested with Madoff.

Bramdean, Barclays, and UBS were not available for comment.

Industry commentators are divided about the exposure for claims relating to Madoff on D&O and E&O policies, but estimate that claims could amount to anything from $760m to $3.8bn.