Corporate Governance

Banco Santander Takes Lead in Madoff

By Fei-Lu Qian

This week, Spain?s largest bank, Banco Santander SA offered a solution to its clients who had invested 2.33 billion euros ($3.1 billion) in Santander?s Optimal Strategic US Equity Fund that was ultimately channeled to Bernard Madoff. Specifically, Santander is offering 1.38 billion euros ($1.82 billion) in the form of preferred securities with an annual payout of 2% to compensate clients? losses. During a BBC interview, Marc Gross, a partner at the law firm of Pomerantz Haudek Block Grossman & Gross, noted that this offer will create pressure for other banks worldwide with exposures to Madoff?s Ponzi scheme to do the right thing and reimburse their clients as well.

In addition, Santander plans to close seven hedge funds run by its Optimal Investment Services. Those funds are Arbitrage, Multi-Strategy, European Opportunities, US Opportunities, Asian Opportunities, Global Opportunities and Global Trading.

Full post as published by PomTalk on January 28, 2009 (boomark / email).