Madoff victims lose case in Dutch court

Two investors seeking the immediate return of their money from a bank linked to US Ponzi swindler Bernard Madoff had their request turned down by a Dutch court yesterday.

A group of 67 investors are suing SNS Bank for €75m in investments and interest, arguing retail customers bought into products which by law they were forbidden from accessing.

About €15m of the money was invested in Madoff funds, according to the group's lawyer.

But today a Dutch court rejected the request from two retired investors for the return of their investments at current value while the main case is pending.

The court said it was not certain SNS had acted irresponsibly or had misled would-be investors.

In the main case, the group each have an average investment of between €400,000 and €500,000 in funds offered by SNS.

Last month, lawyer Jurjen Lemstra for Stichting Claim SNS/Bos & Partners, the foundation bringing the case, said clients wanted back their original investments plus interest.

"We are disappointed (by today's ruling) ... but for the main case it will not have any negative impact. We are a bit surprised that some matters were not addressed in the ruling," a foundation spokesman said.

SNS Reaal has denied liability for investments made with Madoff funds and said it only executed orders for clients.

"Nevertheless, by way of courtesy it had already offered the relevant group of investors compensation, which was accepted and received by a majority of the group," SNS Reaal said last month.

The company made a provision of €8m in the second half of last year for compensation.

SNS says it does not expect the main case to finish before 2011.

Last March, Madoff pleaded guilty to all 11 charges surrounding a $50bn fraud involving an elaborate Ponzi scheme, and is now serving a 150 year prison sentence. 

In the Ponzi or pyramid scheme, early investors were paid off with new clients' money.

The former chairman of the Nasdaq stock exchange also pleaded guilty to three counts of money laundering as well as perjury, theft from an employee benefit plan and making a false claim to the US financial watchdog.

Several financial institutions were hit when the fraud was uncovered, including a Bank of New York Mellon subsidiary Ivy Asset Management, which has been charged with fraud for misleading clients about investments tied to Madoff.