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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
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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.

The Chairman of the Banco Santander, Emilio Botin.
The Chairman of the Banco Santander, Emilio Botin.   (AP Photo/Juan Manuel Serrano)
A man walks near the entrance of a Banco Santander office in Madrid.
A man walks near the entrance of a Banco Santander office in Madrid.   (AP Photo/Daniel Ochoa de Olza)
Money manager Bernard Madoff arrives at Federal Court in New York, Wednesday, Jan. 14.
Money manager Bernard Madoff arrives at Federal Court in New York, Wednesday, Jan. 14.   (AP Photo/Stuart Ramson)
Spain's Banco Santander, the euro zone's largest bank by market capitalization, said it has a total exposure of $3.07 billion to the alleged investment fraud by Bernard Madoff.
Spain's Banco Santander, the euro zone's largest bank by market capitalization, said it has a total exposure of $3.07 billion to the alleged investment fraud by Bernard Madoff.   (AP Photo/Daniel Ochoa de Olza)
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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?’”
- Marvin Pickholz,
Litigation attorney at Duane Morris

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Banco Santander • Ponzi scheme • securities fraud • Bernard Madoff • Bernard L. Madoff Investment Securities

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