Spanish Bank Offers $1.82B to Madoff Victims

The make-good may prompt other banks to offer compensation to fleeced clients
By Jim O'Neill,  Newser User
Posted Jan 28, 2009 6:43 AM CST
The Chairman of the Banco Santander, Emilio Botin.   (AP Photo/Juan Manuel Serrano)
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(Newser) – Spanish banking giant Banco Santander, whose clients lost nearly $3.1 billion in Bernard Madoff’s Ponzi scheme, has offered to pay back customers some $1.82 billion, reports Bloomberg. The bank is facing a lawsuit in US federal court, filed by investors who say it failed to exercise due diligence with Madoff.

“Other banks are going to see this and customers are going to say, ‘What about us? Are you going to make a similar offer to us?’” says one expert. Likely targets include Bank Medici AG, whose customers lost $3.2 billion—the most among European banks—and Union Bancaire Privee, where customers lost $700 million. Santander will offer clients preferred shares with an annual 2% payout.