Oddo spokesman Arnaud Ploix said his firm sold its clients’ shares in the Luxembourg-based LuxAlpha fund on 4 November but never received the money from UBS, which at the time was the fund’s designated custodian.

Meanwhile, a law firm in Switzerland says it too is considering legal action against UBS over its management of the USD 1.4 billion (EUR 1.05 billion) fund.

Marc Hassberger of Geneva-based Chabrier & Associes said his clients invested several million dollars in LuxAlpha.

"Under Luxembourg law it seems custodian banks have some form of responsibility to make sure the underlying assets are correctly allocated," he said.

"We’ll have to define whether or not they met those responsibilities. My first instinct is that they may have failed."

UBS spokeswoman Tatiana Togni declined to comment on either case, but said that Switzerland’s largest bank established the LuxAlpha fund at its clients’ request.

The bank managed the fund until mid-November, before handing the management over to Access International Advisors.

Rene-Thierry Magon de la Villehuchet, the founder of Access International, committed suicide on 23 December in his New York office after losing large amounts of his own and his clients’ money that was invested with Madoff.

Madoff, a former chairman of the Nasdaq stock market, was arrested 11 December and allegedly told FBI agents he organised a USD 50 billion fraud by paying dividends to existing investors from funds deposited by new clients.

[AP/Expatica]