The trustee seeking money for victims of Bernard Madoff's fraud on Wednesday filed an amended $2 billion lawsuit adding new allegations against UBS AG and related defendants.

Irving Picard, the trustee, accused the Swiss bank of misleading regulators in the United States and Luxembourg about its ties to Madoff, while helping feeder funds funnel their clients' money into his Ponzi scheme.

The Ponzi scheme being run at Bernard L. Madoff Investment Securities LLC was uncovered on December 11, 2008, and Madoff, 73, is now serving a 150-year prison sentence.

Picard's lawsuit against UBS, known as the Luxalpha case, accuses the bank of aiding the fraud by sponsoring foreign feeder funds, including Luxalpha SICAV, lending them an aura of legitimacy.

UBS spokesman Peter McKillop responded in a statement: Our position remains unchanged; the trustee's allegations are completely unfounded and without merit.

UBS was not aware of any wrongdoing by Mr Madoff and will take all appropriate steps to demonstrate that the allegations are false and unfounded.

The trustee is trying to bolster his case after U.S. District Judge Jed Rakoff voided $8.6 billion of claims in a case against HSBC Holdings Plc and others, saying Picard exceeded his power in suing third parties on behalf of former Madoff customers.

That ruling prompted UBS and JPMorgan Chase & Co to ask Judge Colleen McMahon, a colleague of Rakoff's who handles Picard's cases against them, to throw out many of the trustee's claims. JPMorgan was sued for $19.9 billion.

In his UBS lawsuit, Picard accused the Swiss bank of knowingly omitting any reference to Madoff and his firm when identifying Luxalpha managers and custodians to the Commission de Surveillance du Secteur Financier, a Luxembourg regulator.

He also said that when the U.S. Securities and Exchange Commission in 2006 tried to learn whether any UBS affiliates in Europe were over-the-counter option counterparties for Madoff, UBS knew the answer was no, but misled the SEC by claiming to be unable to access the data.

There were no checks and balances on Madoff, Picard wrote. Madoff's scheme could not have been accomplished unless the UBS defendants had agreed to look the other way, while collecting at least $80 million in fees, he added.

Picard had filed roughly 1,050 lawsuits to recover more than $103 billion for Madoff's victims.

He won a major victory on Tuesday when the 2nd U.S. Circuit Court of Appeals upheld as legally sound his decision to limit investor claims to the sums they lost from Madoff, rather than the fictitious profits they had believed they earned.

The UBS case is Picard v. UBS AG et al, U.S. District Court, Southern District of New York, No. 11-04212.

(Reporting by Jonathan Stempel and Steve James; editing by Bernard Orr, Phil Berlowitz, Gary Hill)

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