HSBC Holdings Plc has amended its settlement offer with investors in an Irish fund that had invested with Bernie Madoff, after a U.S. federal judge rejected the original offer because it was "not fair, reasonable or adequate." The British bank's revised settlement, filed Monday in U.S. District Court in Manhattan, still offers shareholders in Thema International Fund as much as $62.5mn, but addresses issues raised by Judge Richard Berman on 9/7/11.   Among the "obvious deficiencies:"  (i) disclosure of legal costs;   and, (ii) setting aside $10mn in reserve for legal fees and expenses for investors to pursue claims against non-settling defendants outside the United States. HSBC's obligations arose from its role as a custodian to the Thema fund, in which it provided administration and other services.  HSBC has estimated that Thema investors lost about $312 million, and that various funds that the bank serviced transferred a net $4.3 billion to Madoff's firm during the period it serviced those funds. All told, the total payout to investors would range from $52.5mn to $62.5mn, depending on how many investors choose not to join the accord.  Lawyers for the investors will seek court approval for fees equal to 18% of the gross settlement fund. In addition to suing HSBC, the investors also sued Thema, which acted as a so-called feeder-fund for Bernie Madoff, as well as other defendants. Thema Settlement Unrelated to Madoff Trustee's Suit. Irving Picard, trustee for the Madoff estate, accused HSBC in a separate lawsuit of ignoring "red flags" about Madoff's fraud.  The federal judge on that case, Jed Rakoff, threw out much of Picard's case back in July, saying the trustee lacked authority to bring about $6.6 billion of claims. The case is:  In re: Herald, Primeo, and Thema Securities Litigation, U.S. District Court, Southern District of New York, No. 09-00289. [Reuters, Bloomberg, 11/28/11]