The US Supreme Court yesterday rejected an appeal by the liquidator of Bernard Madoff’s firm, ending a bid to collect billions of dollars from banks alleged to have helped put money into the fraudster’s Ponzi scheme.

The US Supreme Court yesterday rejected an appeal by the liquidator of Bernard Madoff’s firm, ending a bid to collect billions of dollars from banks alleged to have helped put money into the fraudster’s Ponzi scheme, Bloomberg reported.

The judges said they would not hear arguments from the Madoff trustee, Irving Picard, who sought to sue HSBC, UniCredit and UBS to recoup customer losses. A federal appeals court said Picard lacked authority to press those suits, the report said.

Picard argued in his appeal that the banks “are as responsible as Madoff for the enormous magnitude of customer losses”.

The fraud has led to widespread soul-searching in parts of the financial services industry about the extent to which it needs to tighten controls to ensure a crook such as Madoff does not commit such crimes again. While by no means the only such Ponzi fraudster, his was the largest single crime to have emerged amid the rubble of the 2008 financial crash.

Picard has so far has collected almost $10 billion for victims of the fraud, the biggest of its kind in financial history. Madoff is serving a 150-year jail term after pleading guilty to a scheme that had hit prominent names in the financial world, such as Man Group, the listed hedge fund firm, and Switzerland’s Union Bancaire Privée. It is estimated that the fraud cost people around $17 billion, according to Bloomberg.

The report said the court ruled that Picard could not go after JP Morgan; that bank in January this year took itself out of the legal dispute by agreeing to settle Picard’s claims for $543 million. JP Morgan also said it would pay more than $2 billion to resolve government allegations.

In throwing out Picard’s suits against the banks, the New York-based appeals court said he lacked the legal right, or standing, to sue on behalf of defrauded investors, the report added.