By Nate Raymond

NEW YORK, Feb 26 (Reuters) - Fairfield Greenwich Group investors who saw their money funneled to now imprisoned Ponzi schemer Bernard Madoff can proceed as a class, assuming they're not in 25 countries.

U.S. District Judge Victor Marrero in Manhattan on Monday certified the class action by investors in four funds run by Fairfield. But the judge excluded investors in 25 countries over questions of whether those jurisdictions would recognize a U.S. class action judgment.

The decision has the effect of excluding investors with nearly 27 percent of the alleged losses, according to a document the plaintiffs filed last year.

Stuart Singer, a lawyer with Boies, Schiller & Flexner representing the investors, said he still needed to study the decision to determine the exact impact of the holdings regarding specific countries.

"We're very gratified the court has certified the class action and agreed with basic position that it should proceed as a class," Singer said.

Lawyers for the defendants either declined comment or didn't respond to requests for comment.

Fairfield agreed in November to an $80 million settlement, though Madoff trustee Irving Picard of Baker & Hostetler has sought to block the accord.

Other defendants meanwhile remain, including CITCO Group Ltd, GlobeOp Financial Services LLC, and two units of PricewaterhouseCoopers.

The lawsuit contends Citco and GlobeOp, which acted as administrator for the Fairfield funds, and PwC, which audited them, failed in their duties and ultimately allowed Madoff to get off with their money.

The plaintiffs and Fairfield defendants had submitted dueling expert reports on the question of whether particular foreign countries would recognize a class action judgment and whether recognition would violate each country's public policy.

But the majority of countries haven't directly addressed the efficiency and fairness of class action procedures, much less whether a U.S. class action judgment could be recognized, Marrero said.

The legal analysis the parties submitted, as a result, "amount to no more than high-priced arm-chair oracles."

Instead, Marrero said as long as a plaintiff demonstrates a foreign country's policy is to recognize and enforce foreign judgments, absent a showing to the contrary, the presumption will be that even a U.S. class action judgment will not violate its policy.

The presumption is "especially warranted" where the foreign courts don't typically get into the underlying substantive issues in the judgment "and therefore have not had the occasion to explicitly embrace, or reject, a particular question of procedure or substance," he wrote.

EXCLUDED COUNTRIES

Marrero said the plaintiffs demonstrated that a foreign judgment would be recognized by courts in the Netherlands, United Kingdom, Canada, Spain and Belgium, along with various Latin American countries.

Most countries that are members of the European Community or signatories to the Lugano Treaty also would recognize a judgment involving absent class members, he said.

But he said the plaintiffs failed to show a French or Luxembourg court would recognize a foreign judgment in an opt-out class action.

Marrero had made a similar ruling in a 2008 securities class action against Alstom SA. An amicus brief by France in the U.S. Supreme court case Morrison v. National Australia Bank that the country would "almost certainly" not recognize a U.S. class action had only added support for his earlier conclusion, Marrero said.

He also excluded investors from Switzerland, noting that the plaintiffs' own expert had stated that absent class members wouldn't be bound by a class action judgment and could initiate duplicative litigation back home.

Other countries where investors are excluded include Israel, Kuwait, Korea, North Korea, Pitcairn, Tokelau, Mongolia, China, Liechtenstein, Japan, Oman, Taiwan, United Arab Emirates, Qatar, Saudi Arabia, Bosnia, Andorra, San Marino, Namibia, Monaco, Germany and South Africa.

The case is Anwar v. Fairfield Greenwitch Limited, U.S. District Court, Southern District of New York, No. 09-0118.

For the plaintiffs: David Barrett and Stuart Singer, Boies, Schiller & Flexner; Robert Finkel, Carl Stine and James Harrod, Wolf Popper; and Christopher Lovell and Victor Stewart, Lovell Steward Halebian.

For Fairfield: Mark Cunha, Simpson Thacher & Bartlett.

For PricewaterhouseCoopers (Canada): Timothy Duffy, Kirkland & Ellis.

For PricewaterhouseCoopers (Netherlands): William Maguire, Hughes Hubbard & Reed.

For GlobeOp Financial Services: Jonathan Cogan, Kobre & kim.

For Citgo: Brad Karp, Paul, Weiss, Rifkind, Whartson & Garrison.

(This article has been corrected to fix the spelling of Judge Victor Marrero's last name in the 11th and 15th paragraphs.)

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