Defender Limited

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Defender Limited is an investment fund incorporated in the British Virgin Islands in 2007, that acted as a feeder fund by sending client money exclusively to Bernard Madoff's firm, Bernard L. Madoff Investment Securities (BLMIS), as part of the Ponzi scheme run by Madoff.^{[1][2][3][4][5]} Madoff pleaded guilty to fraud in March 2009, and is serving a 150-year prison term.^[6]

Defender was formed in May 2007, a year and a half prior to Madoff’s December 2008 arrest.^[7] It was formed with the backing of people who had promoted investing with Madoff since 1999.^[8] According to the Securities Investor Protection Act (SIPA) Trustee Irving Picard, Defender was created by the Reliance Group, which was in turn created by Tim Brockmann, an investment manager based in Switzerland and Gibraltar.^[9]

In December 2013 Defender sued HSBC Institutional Trust Services Incorporated, an Irish subsidiary of HSBC Bank with registered offices at Grand Canal Square, Dublin, in an Irish court for $539 million.^{[10][11][12][13]} Defender alleged that the bank, while acting as a custodian, was negligent and breached an agreement by not carrying out adequate due diligence on Madoff.^[14][15][16] Defender also alleged the bank failed to warn Defender that Defender's assets were at risk and failed to advise Defender that HSBC was not able to confirm the actual existence of Defender's assets.^[17][18] The case was due to be litigated in court for a period of at least five months.^[19] In December 2018, Justice Michael Twomey of the High Court of Ireland ruled that because Defender had settled its claim with BLMIS for the return of $540 million (the loss of Defender's investment) for at least 75% of that sum, Defender’s claim against HSBC for $141 million was reduced by 100% as a result of Defender’s prior settlement with BLMIS.^[20] Defender has appealed that decision to the Irish Court of Appeal, and the appeal is pending.^[21]

On April 16, 2015, the United States Bankruptcy Court for the Southern District of New York approved a recovery agreement between the SIPA Trustee Picard, and Defender and related entities.^[22] Under the agreement, the BLMIS Customer Fund would benefit by $93 million, representing all of the money Defender took out of its fund from Defender's formation until the Madoff liquidation began -- 100% of the fraudulent transfers and preference payments which the SIPA Trustee sought to recover from Defender.^[23][24] The settlement called for Defender to receive a $522.8 million claim in the liquidation of BLMIS, because Defender deposited more with BLMIS than it withdrew.^[25]

• List of investors in Bernard L. Madoff Securities

Category:Financial services companies of the British Virgin Islands Category:Investment management companies Category:Companies established in 2007 Category:Madoff investment scandal