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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 48 of 133 d. UBS SA Regularly Moved Luxalpha Investor Money Into and Out of BLMIS in New York Through its United States Bank Account Consistent with the Sub-Custodian agreement, UBS SA regularly moved investor money into and out of BLMIS in New York, including through the use of a correspondent bank account at UBS AG in Stamford, Connecticut. When a Luxalpha investor provided money to subscribe into the fund, UBS SA was responsible for moving the funds to the sub-custodian, BLMIS. (See Pergament Decl. Ex. 28 at 13.) Investors who wished to invest in Luxalpha through U.S. dollar subscriptions were asked to wire money into UBS SA’s account at UBS AG’s Stamford Branch. (Pergament Decl. Ex. 29 at 2.) UBS SA then directed subscription moneys to a BLMIS account at JPMorgan in New York. (Pergament Decl. Exs. 28 at 13; 9 at 22.) Likewise, UBS SA processed investor redemptions from BLMIS, and paid the money to investors. (Pergament Decl. Ex. 28 at 12.) All Luxalpha redemptions were requested from BLMIS by UBS SA and processed through UBS SA’s account at UBS AG’s Stamford Branch. (See, e.g., Pergament Decl. Ex. 30.) From Luxalpha’s inception in 2004 through the collapse of BLMIS in 2008, UBS SA executed numerous transfers between Luxalpha and BLMIS, representing over a billion dollars in investor funds. (See Am. Compl. Ex. B.) By directing these transfers into and out of New York, and by maintaining a correspondent bank account in the United States for the facilitation of these transfers, UBS SA is subject to this Court’s jurisdiction. See Chais, 440 B.R. at 279–80 (jurisdiction is proper where claims are “inextricably related . . . [to] transfers of BLMIS funds to and from [Defendant’s] BLMIS brokerage accounts or other United States bank accounts”); Dale v. Banque SCS Alliance S.A., No. 02 Civ. 3592 (RCC) (KNF), 2005 WL 2347853, at *3 (S.D.N.Y. Sept. 22, 2005) (holding that jurisdiction existed where the defendant “maintain[ed] several correspondent bank accounts in New York that it used to effect a number of the funds 28
10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 49 of 133 transfers that [were] the subject of th[e] action”); Indosuez Int’l. Fin. B.V. v. Nat’l. Reserve Bank, 774 N.E.2d 696, 701 (N.Y. 2002) (holding defendant’s maintenance of a New York bank account for payments related to the dispute sufficed for the assertion of personal jurisdiction); Banque Generale Du Commerce, 1997 WL 266968, at *2 (“[A] cause of action arising out of a transaction involving the use of a correspondent account [in New York] may confer jurisdiction over defendant in New York.” (emphasis in original)). e. UBS SA Personnel Regularly Communicated with BLMIS Employees in New York Regarding Luxalpha Further supporting the jurisdictional nexus, UBS SA personnel regularly communicated with BLMIS employees in New York regarding Luxalpha. UBS SA’s own records show that BLMIS sent UBS SA copies of trade and account information, including mid-month transaction information and monthly account statements. (Pergament Decl. Exs. 28 at 13; 31.) Further, BLMIS records reveal that UBS SA personnel regularly communicated with BLMIS, including with regard to “mismatched” trade tickets, tax issues, and missing account statements, and that these communications continued through the day of Madoff’s arrest. 15 These communications demonstrate the consistent nature of the relationship that existed between UBS SA and BLMIS. They were made in furtherance of UBS SA’s business relationship with BLMIS, pursuant to which UBS SA earned fees from Luxalpha which the Trustee now seeks to recover. See Cohmad, 418 B.R. at 80–81 (holding foreign defendants had sufficient minimum contacts where they “continuously sent correspondence to the United States to direct transfers and withdrawals to and from these accounts”); Golden Archer Investments, LLC v. Skynet Financial Systems, No. 15 The customer files of BLMIS demonstrate regular fax communication between UBS SA and BLMIS. (See, e.g., Pergament Decl. Exs. 32, 30.) In addition, a preliminary review of BLMIS’s phone system suggests at minimum 21 calls between UBS SA and BLMIS from October 2005 through the day of Madoff’s arrest in December 2008, and at least 4 calls between UBSFSL and BLMIS during this period. (Pergament Decl. Ex. 33.) Moreover, UBS SA does not deny that it was in regular communication with BLMIS and Madoff. See Baumert Decl. 17 [Bankr. S.D.N.Y. ECF No. 112.]) 29
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