Ethics and governance in the European Financial centers

According to the press quoting a Luxembourg MP, EUR 5-7 billion have been funneled into Madoff's Ponzi scheme through Luxembourgish banks and fonds. Luxembourg's Spuerkeess (BCEE) should have been affected.
The Madoff fraud worldwide is assessed USD 50 billion This means that Luxembourg has 18.4% of the fraud in its investment funds (1 EUR = 1.31585 USD) for a jurisdiction of 2500 km2 (about 1000 sq miles).

The count of how much Luxembourg funds had committed in the Madoff case have been revised up," (The CSSF had initially estimated at the end of December that Luxembourg funds had EUR1.9 billion invested in funds managed by Bernard Madoff) said the lawmaker, who is a member of the financial crisis commission in Luxembourg's parliament.
"The experts have tallied the amount between five and seven billion euros," the MP added, speaking on condition of anonymity.
"It's mainly the assets in three Luxembourg funds: Lux Alpha, Lux Invest and Herald fund Luxembourg," he said

Know more : an interresting blog that inspire the wording at the begining of my article. Unfortunately the currency is wrong and the author is not courageous enough to provide his or her identity.

Luxalpha Sicav, Société d’Investissement à Capital Variable was created on 5 February 2004 by UBS.

Roger Hartmann, Managing Director, UBS (Luxembourg) S.A. was elected as director.
Ernst & Young was appointed the auditor.

Roger Hartmann remained director until the last election in the Memorial dated 26 June 2006 when he was elected for a one-year period. The publication of the information was done more than one year later (on 22 September 2007)

We don’t know what happened in 2007-2008, and especially who was elected director mid 2007.


On 15 November 2007, Roger Hartmann joined Ernst & Young as partner to focus on the development of Ernst & Young’s Advisory Services for financial services clients.
The press release underlines that Roger Hartmann “has played an active role in the development of Luxembourg’s financial centre. At the Luxembourg Bankers’ Association (ABBL), he became the founding chairman of the Private Banking Group; he is also a member of the Board of Directors. He is a member of two committees of the Luxembourg’s financial sector supervisory authority (CSSF): banking and anti-money laundering. At the Luxembourg School of Finance, as well as lecturing at the yearly Financial Services Strategy seminars, he has been instrumental in the development of the research and executive programmes.

In the context of the Madoff case were UBS/Luxalpha is involved and where there are questions about the weaknesses of the auditor of the fund, I do not think it is a good thing to allow the auditee to join the auditor even for advisory services all the more than Mr Roger Hartmann was representative of the fund.

There should be a tree-year-period to be able to do so.