Madoff’s Medical Woes and The Luxembourg Test Case
Apparently prison doesn’t agree with Bernard Madoff. Bloomberg is reporting that Madoff was transferred just before Christmas to the Federal Medical Center at the Butner Federal Correctional Complex in Butner, North Carolina.
It was also being reported that Madoff was being treated for dizziness and hypertension according to Federal Bureau of Prisons spokeswoman Traci Billingsley. There were originally reports that Madoff had been in the hospital as the result of an assault from another prisoner but Madoff’s lawyer Ira Sorkin told the Associated Press that Madoff had dizzy spells and high blood pressure. This follows after rumors which surfaced earlier this year claiming that Madoff had been diagnosed with cancer and was terminally ill. These rumors were since proven false.
Here is a video about the Madoff move to the medical facility:
In other Madoff news, a so-called test case is scheduled to be tried in Luxembourg in 
early 2010. This case is focused on the role played by custodian bank UBS and HSBC in relation to their role as depositaries for the Luxembourg-based LuxInvest and LuxAlpha feeder funds which lost over $2 billion with Madoff.
This case is receiving a great deal of attention largely because Luxembourg has pushed in recent years to attract hedge funds. Many are viewing the outcome of this case as a signal to see if the Luxembourg financial regulator, CSSF, will uphold rules on investor protection.
Lawyers representing investors claim that UBS, as custodian, was responsible for the safety of investors assets. On the other side, lawyers from UBS argue that funds were set up at investors’ behest specifically to feed into Madoff’s funds, and that investors knew their assets were held with Madoff’s securities firm and signed a waiver removing responsibility from UBS. It will be interesting to see whether such waivers will hold up in court…..
Here is Ralph Nader’s take on the Madoff crisis from earlier in the year:
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