Spain's Santander is compensating individual investors for Madoff losses
MADRID - Spanish bank Santander has offered €1.38 billion in compensation to individual clients exposed to Bernard Madoff's $50 billion hedge fund-cum-ponzi scheme unearthed in December 2008.
The €1.38 billion (£1.28 billion) will be used to pay individual investors but not institutions caught by the Madoff pyramid scheme. Santander will issue the €1.38 billion in preferential shares with an annual 2% coupon to compensate its clients, costing €500 million.
Santander-operated hedge fund Optimal Strategic US Equity used Madoff's scheme to handle client investments, losing €2.3 billion to the fraudster. Paul Marshall, the co-founder of the Marshall Wace hedge fund, told a UK Treasury Committee yesterday that it is "very unlikely" a Madoff-type scheme could operate in the UK, but that hedge fund disclosures should be generally improved.
More on Regulation
Regulator announces reforms in response to financial crisis failings
Matherat to Deutsche, O'Malia to Isda - regulatory moves worry some
Record-breaking settlement between Bank of America and US federal and state entities
Top regulators want FSB to fix clash between reporting rules and privacy laws
Sign up for Risk.net email alerts
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
Watch discussions and speakers from our North America conference
In the February 2014 editorial video, OpRisk's latest industry survey finds room for improvement in risk management
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.