Banking giant HSBC (HSBA.L) has agreed to pay $62.5 million (£38.1 million) to settle a New York class action by investors who were invested in Madoff funds.

The action relates to investors in the Irish-domiciled UCITS III Thema International Fund, whose money was invested in Bernard L Madoff Securities.

Bernard L Madoff Securities was set up by convicted Ponzi fraudster Bernard Madoff, who was jailed for 150 years after losing investors $18 billion.

The bank, which provided custodial and administration services to funds invested with Bernard L Madoff Securities, has been named alongside a range of other defendants in a number of jurisdictions.

HSBC revealed funds serviced by the bank had a net asset value of $84 billion, according to Bernard L Madoff Securities, at 30 November 2008.

However, the amount had included 'fictitious profits' and was instead in the region of $4.3 billion.

Although Madoff Securities had reported a net asset value for Thema of $1.1 billion, actual transfers to Madoff Securities minus its withdrawals was around $312 million.

According to HSBC, should not be 'construed or deemed to be evidence of or an admission or concession' to any claim and considered it had 'good defences' against Madoff-related claims and would continue to defend other proceedings.

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