Banks that acted as custodians for Madoff investments are starting to really feel the heat. This time, more than two dozen retirement account holders are suing Connecticut-based Westport National Bank for $60 million for their Bernie losses. While the custodial agreement spells out that individuals agree they did not rely on the bank in choosing Madoff, it also states that the bank would properly document the customers’ ownership in the Ponzsters investments. Lack of personal accountability and flat out greed played a huge role in Madoff client losses. But when a bank, which has every opportunity to bury CYA language deep in client agreements, blatantly disregards is obligations, they wind up looking about as credible (and guilty) as Bernie.
Connecticut Bank Sued in Madoff Investment Scheme [NYT]