Austria Picks Overseer for Bank in Madoff Case
Austria Picks Overseer for Bank in Madoff Case

Published: January 2, 2009
The management of Bank Medici, the small Austrian merchant bank that emerged as one of the largest victims of the Bernard L. Madoff scandal, resigned on Friday, making room for a government-appointed accountant to temporarily take over day-to-day operations.

A pedestrian passed Bank Medici on Friday in Vienna. The bank’s dealings with Bernard L. Madoff cost it billions.

Ronald Zak/Associated Press
The bank’s chief executive and a board member have resigned, effective immediately.
The chief executive, Peter Scheithauer, who joined the bank only four months ago, and a board member, Werner Tripolt, resigned effective immediately. The bank, based in Vienna, disclosed earlier that $2.1 billion in client funds had been invested with Mr. Madoff, who is accused of orchestrating a $50 billion Ponzi scheme.

The bank declined to comment on the reason for the executives’ departure and said it would appoint new management soon.

Austria’s financial regulator, the Finanzmarktaufsicht or FMA, appointed an accountant, Gerhard Altenberger, to oversee the bank because of concerns it might be unable to fulfill some obligations to creditors.

“The appointment of the commissioner is intended to secure the financial interests of creditors and the funds held by the company,” the FMA said in a statement.

Bank Medici, which is mainly owned by the Viennese banker Sonja Kohn and in which UniCredit’s Bank Austria holds a 25 percent stake, generated most of its revenue from marketing and managing the two funds that invested with Mr. Madoff since 2004.

The bank, which was founded in 1994 and has offices in New York, Milan, Gibraltar and Zurich, said it would work with the commissioner in a “constructive” way to provide “the best possible transparency and efficiency.”

“The status of the bank is still solid” and its liquidity is high, the bank said. It also said it had not yet received any compensation claims and does not expect to receive any because it has always kept to its legal obligations. Wolf Theiss, an Austrian law firm representing Bank Medici, said it was currently looking into possible claims by the bank.

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