HSBC agreed to compensate Madoff investors, thereby avoiding a class action lawsuit.   The bank will pay $62.5 to Thema Fund investors who had filed class action claims.  HSBC, which was named as a defendant in several lawsuits, serviced several funds outside the United States, including the Thema International Fund in Ireland, which invested assets with Bernie Madoff’s firm.  HSBC had served as a custodian and provided administration and other services, the banks said in a statement.

All told, HSBC estimates that Thema investors lost about $312 million by investing with Mr. Madoff - which means they're still out about $250 million.  Assets across all such funds totaled about $4.3 billion, the bank said.

This settlement was with just one fund - there are others.  HSBC said it "will continue to defend the other Madoff-related proceedings vigorously."  HSBC also faces a lawsuit from Madoff trustee Irving Picard.  In December, Mr. Picard sued HSBC and some funds that invested with Mr. Madoff for $9 billion.   [NYT DealBook, 6/7/11]