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Bank Austria: Primeo-investor Wins in First Instance

Published: September 27, 2010; 14:13 · (Vindobona)

An investor asked Bank Austria to sell her Primeo participation two months before the Madoff fraud was busted, but Bank Austria has not paid up yet.

Bank Austria: Primeo-investor Wins in First Instance / Picture: © Uni Credit Group Bank Austria

After Bank Austria won three suits in first instance related to their "Primeo” fund, the monies of which flowed mostly to the U.S. billion fraudster Bernard Madoff, they have now suffered a defeat.

As the "Format" reports, an investor obtained favorable judgment from the Commercial Court (HG). In 2003 she invested 50,000 euro in the "Primeo" fund on the advice of the bank, not knowing that Madoff managed the fund. In October 2008, two months before the pyramid scheme was uncovered, she instructed the bank to sell her participation. The bank has not accepted to pay out the results of the sale to this date, according to the magazine.

Bank Austria intend to appeal. They stress that they forwarded the customer's order to sell in accordance with the deadlines listed in the prospectus. "Unfortunately, the sales application was made shortly before Mr. Madoff’s fraud was uncovered, so that the fund could not perform the job. This cannot be blamed on us", it is said in a statement. The ruling –which is not final- has nothing to do with issues of prospectus liability or investment advice. The decision is therefore not relevant for the other procedures.