Madoff trustee Irving Picard loaded up his court calendar with new lawsuits against 7 banks;  he's seeking $425 million from Citigroup and $400 million from Nataxis.  Complaints were filed for lesser amounts against Merrill Lynch, Fortis, ABN Amro, Banco Bilbao Vizcaya Argentaria and Nomura.  In recent weeks, Picard filed multibillion-dollar suits against HSBC, JPMorgan Chase and UBS.

The banks named on Wednesday had offered investors derivative investment products and other financial instruments whose returns were tied to the performance of funds that channeled investments to Mr. Madoff’s firm.  In turn, the banks hedged their exposure to the derivative investors by buying shares of the funds, known as feeder funds. 

The suits seek to recover money that the banks received in connection with the derivative products they offered and redemptions they had made before Bernie Madoff’s extensive fraud became public.  Mr. Picard said the banks had continued to structure transactions to take advantage of the returns that Bernie's firm appeared to be producing, even though there were signs of fraud.  Mr. Picard cited an e-mail message and a meeting between a Citigroup managing director and Harry Markopolos, a whistle-blower said to have alerted the bank that Bernie was running a Ponzi scheme.  A spokesperson for Citigroup said the bank would fight the suit, noting, “Citi did not know about nor in any way assist in the Madoff fraud.”   [NYT Dealbook, 12/9]