KPMG UK has denied allegations that it failed in its duties when auditing Madoff Securities International, the London branch of the disgraced financier's operations.
Law firm Cotchett, Pitre and McCarthy is bringing a lawsuit on behalf of investor Jay Wexler who invested hundreds of thousands of dollars in the Rye Select Broad Market Prime Fund, a feeder fund of Madoff's Ponzi scheme.
In a statement, the law firm stated that KPMG "failed to raise any red flags that investors' money was used by Madoff as his personal piggy bank".
They also claimed that the London branch of Madoff operations had played a key part in making it look like he was trading securities.
Responding to the accusations, KPMG said in a statement that they were "wholly without merit" and that it will "vigorously" defend itself against the complaint.
Earlier in 2009, Madoff pleaded guilty to 11 misdemeanours and he is now serving 150 years in jail.
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