Defender Limited is an investment fund. It was incorporated in the British Virgin Islands in 2007. Defender funneled clients' funds to Bernard Madoff's firm as part of a

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...

run by Madoff. Madoff was arrested in December 2008, and pleaded guilty to fraud in 2009. He is serving a 150-year prison term.

Formation

Defender was formed in May 2007. It was formed with the support of individuals who had encouraged investing with Madoff since 1999. According to the Securities Investor Protection Act (SIPA) Trustee for BLIMIS assets Irving Picard, Defender was created by the Reliance Group. The Reliance Group was, according to Picard, in turn established by Tim Brockmann, an investment manager in Switzerland and

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Activities

Defender acted as a

feeder fund A feeder fund is an investment fund which does almost all of its investments through a ''master fund'' via a master-feeder relationship. It is a situation similar to a fund of funds A "fund of funds" (FOF) is an investment strategy of holding ...

, by funneling clients' funds to Bernard Madoff's firm,

Bernard L. Madoff Investment Securities Bernard Lawrence Madoff ( ; April 29, 1938April 14, 2021) was an American fraudster and financier who was the admitted mastermind of the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ s ...

(BLMIS), as part of a

run by Madoff. Madoff was arrested in December 2008, and pleaded guilty to fraud in 2009. He is serving a 150-year prison term.

Litigation

In December 2013, Defender sued HSBC Continental Europe (formerly HSBC France; HSBC Institutional Trust Services Incorporated), an Irish subsidiary of HSBC Bank with registered offices in Dublin, in an Irish court for $539 million. Defender alleged that the bank failed to conduct adequate

due diligence Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care. It can be a l ...

on Madoff, and failed to warn Defender that HSBC was not able to confirm the existence of Defender's assets. In December 2018, the High Court of Ireland ruled that Defender's claim against HSBC was reduced by 100% due to Defender's earlier settlement with BLMIS. Defender appealed that decision to the Irish

Court of Appeal A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...

. On April 14, 2021, the day Madoff died, the case settled immediately before proceedings were due to begin in court before Mr Justice

Mark Sanfey Mark Sanfey is an Irish judge and lawyer who has served as a Judge of the High Court of Ireland since December 2019. He previously practiced as a barrister specialising in insolvency and bankruptcy law. Early life Sanfey was educated at Tri ...

, and was scheduled to last 24 weeks. On April 16, 2015, the United States Bankruptcy Court for the Southern District of New York approved an agreement between Picard on the one hand, and Defender and related entities on the other hand."Defender"
/ref> The BLMIS Customer Fund benefited by $93 million. Defender received a $522.8 million claim in the BLMIS liquidation, because Defender had deposited more with BLMIS than Defender withdrew.

References

{{Madoff investment scandal Investment companies of the British Virgin Islands Financial services companies established in 2007 Madoff investment scandal

Formation

Activities

Litigation

See also

References