Standard Chartered Clients Seek Fee Repayment Over Madoff - Report

Tom Burroughes

16 June 2009

While lawsuits over the Bernard Madoff fraud multiply, investors are seeking class-action status in a Miami federal court against UK-listed Standard Chartered over the recovery of fees charged to invest in a fund that allegedly channelled money to Mr Madoff, according to the Miami Herald newspaper.

A Mexican couple late last week sued Standard Chartered, claiming the fees they paid the bank to invest in the Madoff feeder fund Fairfield Sentry were based on ''phantom or fraudulent valuations'' of the fund's assets, the newspaper said.

The suit claims the damages of the plaintiffs and the proposed class are more than $5 million. Standard Chartered placed about $300 million of investors' money in the Sentry fund, the suit alleges.

''The crux of the suit is what's lost is lost, unfortunately, but at the very least you have to give back the fees you did not earn,'' David Rothstein, a Miami lawyer who filed the lawsuit in US District Court in Miami, was quoted as saying.

Plaintiffs Jose Antonio Pujals and his wife, Rosa Julieta de Pujals, invested about $600,000 in the Sentry fund and paid about a half per cent a year in management and administrative fees, or about $3,000, Mr Rothstein said.

Standard Chartered was not immediately available for comment when contacted by WealthBriefing on the matter.