Citigroup Inc. asked a judge to dismiss $130 million of claims by the liquidator of Bernard Madoff's brokerage, saying that the funds were received as part of a swap transaction with a hedge-fund customer who was betting on the performance of a feeder fund to the Ponzi scheme, Bloomberg News reported yesterday. Safe harbor laws, devised to protect banks, stop the Madoff trustee from undoing swap deals, the bank said in a court filing. U.S. District Judge Jed Rakoff took the Citigroup case out of bankruptcy court, along with hundreds of other Madoff suits, to decide what trustee Irving Picard is permitted to do under safe-harbor law. Picard originally sued Citigroup for $430 million.
