NEW YORK (Bloomberg) — HSBC Holdings Plc and a Cayman Islands-based hedge fund were sued by the trustee liquidating Bernard Madoff's business over claims they withdrew $578 million in "fake" profit from the con man's firm before it collapsed.

The lawsuit, filed today by trustee Irving Picard in US Bankruptcy Court in Manhattan, claims London-based HSBC withdrew most of the money on behalf of its client, Herald Fund Spc, less than 90 days before Madoff's firm began liquidating. Picard says such transfers are recoverable under US bankruptcy law.

The so-called clawback lawsuit against HSBC and Herald is one of at least eight filed against the biggest investors in York-based Bernard L. Madoff Investment Securities LLC. The earlier complaints seek a total of $13.7 billion in damages to be used to repay victims of Madoff's $65 billion fraud.

Madoff, 71, pleaded guilty in March and was sentenced on June 29 to 150 years in prison for using money from new clients to pay earlier investors in the biggest US Ponzi scheme. Picard, hired by the Securities Investor Protection Corp., said earlier this month he has thus far recovered $1.08 billion in assets.

Patrick McGuinness, an HSBC spokesman, didn't immediately return a call seeking comment.