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Madoff victims offered settlement | Madoff victims offered settlement |
(about 19 hours later) | |
Spanish bank Santander says it will compensate private clients who suffered losses from the alleged fraud run by US businessman Bernard Madoff. | Spanish bank Santander says it will compensate private clients who suffered losses from the alleged fraud run by US businessman Bernard Madoff. |
The bank said it will offer clients a 1.38bn euro ($1.8bn;£1.3bn) settlement. | The bank said it will offer clients a 1.38bn euro ($1.8bn;£1.3bn) settlement. |
Santander is being sued over claims it did not do enough to prevent losses in funds that invested with Mr Madoff. | Santander is being sued over claims it did not do enough to prevent losses in funds that invested with Mr Madoff. |
He is accused of perpetrating one of the largest-ever Wall Street frauds, through a $50bn (£33.2bn) scheme that wiped out many investors. | He is accused of perpetrating one of the largest-ever Wall Street frauds, through a $50bn (£33.2bn) scheme that wiped out many investors. |
Santander is the largest bank in the eurozone and owns Abbey and Alliance & Leicester in the UK. | Santander is the largest bank in the eurozone and owns Abbey and Alliance & Leicester in the UK. |
'Exceptional circumstances' | 'Exceptional circumstances' |
Santander has said its customers have exposure of 2.3bn euros to Mr Madoff through its private banking business, Optimal. | Santander has said its customers have exposure of 2.3bn euros to Mr Madoff through its private banking business, Optimal. |
The bank will issue 1.38bn euros worth of preferred shares to compensate individual customers. The move will cost the bank 500m euros. | The bank will issue 1.38bn euros worth of preferred shares to compensate individual customers. The move will cost the bank 500m euros. |
It said that it had decided to offer compensation because of the "exceptional circumstances" and to maintain its business relationships with clients affected by the alleged fraud. | It said that it had decided to offer compensation because of the "exceptional circumstances" and to maintain its business relationships with clients affected by the alleged fraud. |
Spanish law firm Cremades & Calvo-Sotelo said that it had filed a class action suit in Florida with its US partner firm Labaton Sucharow. | Spanish law firm Cremades & Calvo-Sotelo said that it had filed a class action suit in Florida with its US partner firm Labaton Sucharow. |
The lawsuit claims that Santander was negligent in allowing its Optimal Strategic US equity fund to invest with Mr Madoff. | The lawsuit claims that Santander was negligent in allowing its Optimal Strategic US equity fund to invest with Mr Madoff. |
Santander said in a statement that it acted in accordance with all applicable laws and sound banking practices and procedures. | |
"Grupo Santander has acted at all times with the due diligence in the management of its clients' investments," it said in a statement. | "Grupo Santander has acted at all times with the due diligence in the management of its clients' investments," it said in a statement. |
The Madoff scandal has hurt a number of high-profile banks and financial institutions. | The Madoff scandal has hurt a number of high-profile banks and financial institutions. |
Austria has taken control of Bank Medici, a small, private bank, because of the losses it sustained. | Austria has taken control of Bank Medici, a small, private bank, because of the losses it sustained. |
In the UK, the Serious Fraud Office has said it would investigate Mr Madoff's business operations. | In the UK, the Serious Fraud Office has said it would investigate Mr Madoff's business operations. |
Marc Gross, of the US law firm Pomerantz, which represents some of Mr Madoff's clients, told the BBC that the compensation was "very significant". | |
"I think it's taking ownership of the problem, taking accountability and standing up and saying we are going to reimburse... those who've been defrauded." |
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