One small country is moving to keep its investment industry from becoming another casualty of the Bernard Madoff scandal.

Luc Frieden, Luxembourg’s treasury minister, said yesterday that he hopes the “dozens” of lawsuits stemming from Madoff’s fraud filed in the Grand Duchy can be settled out of court. Some 17 funds domiciled in Luxembourg have suspended redemption due to Madoff-linked losses.

“I urge an extra-judicial settlement in these cases,” Frieden said at a conference. “As long as this goes on it will be bad for the whole industry.”

“I will not allow mistakes of some to damage the industry overall.”

Madoff pleaded guilty last week to defrauding investors; he faces as much as 150 years in prison. He is accused of ripping investors off to the tune of more than $50 billion in the largest Ponzi scheme in history.

Included in the suit are LuxAlpha board member Patrick Littaye, co-founder of Access International Advisors, and Roger Hartmann, the former head of UBS Luxembourg SA, who in 2007 joined the global financial services team at Ernst & Young Luxembourg, according to the court filing.