National Post (National Edition)
CANADA’S LINK TO CONVICTED FRAUDSTER BERNIE MADOFF CONTINUES A DECADE LATER.
CANADA’S CONNECTION TO THE CONVICTED FRAUDSTER CONTINUES THROUGH THE COURTS A DECADE LATER
Ten years ago this week, Bernard Madoff confessed to running a massive Ponzi scheme that defrauded investors of billions and billions of dollars. The wave of litigation that followed has still not completely receded, and at least one lawsuit has fallen into the Canadian court system.
Why this is the case is due to the usually sedate subject of auditing financial statements, in this case statements reviewed by a branch of PricewaterhouseCoopers, one of the world’s largest professional services firms. It was around 12 years ago that the manager of three offshore investment funds — Fairfield Sentry, Fairfield Sigma and Fairfield Lambda — turned to a Canadian arm of PwC to look over the funds’ financial statements, switching the task from a PwC office in the Netherlands.
It should have been a relatively unremarkable move if not for one fatal fact. The funds, all incorporated in the British Virgin Islands, had assets worth billions of dollars, the bulk of which were ultimately invested with Bernard L. Madoff Investment Securities LLC (BLMIS).
Madoff, of course, revealed his Ponzi scheme in 2008, rocking the financial world and sending his investors reeling, including the three Fairfield funds, which were placed into liquidation in the British Virgin Islands in 2009.
The funds and their liquidator launched a lawsuit against an Ontario limited liability partnership of the PwC network in 2012, and the matter has been winding its way through the province’s courts even since.