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Spanish Madoff investors in bid to recover funds
Graham Keeley
The Times
Sun, 25 Jan 2009 20:35 UTC
More than one hundred Spanish investors who lost at least €120 million over Bernard Madoff's $50 billion fraud are to hold talks with Barclays Bank and Banco Santander in a bid to reclaim cash.
The Association of Victims of Madoff represents small and medium-sized investors, mostly from Spain but also Latin America.
The investors, who lost amounts varying between €150,000 and €10 million, will hold talks next week with Santander, owner of Abbey, Alliance and Leicester and Bradford and Bingley.
Other meetings are planned with Barclays, Fortis of Holland and the Portuguese bank Espirito Santo.
Other meetings are planned with Barclays, Fortis of Holland and the Portuguese bank Espirito Santo.
Javier Cremades, president of the Madrid law-firm Cremades and Calvo Sotelo which is representing clients, said the association was formed "to reach extra-judicial agreements with the banks which sold these products in order to get back €120m".
Mr Cremades said any legal claims could be based on whether clients received sufficient information from the banks about the products they were investing in and if the banks acted "irresponsibly and negligently" by failing to monitor Mr Madoff's activities.
Another law firm is the Barcelona-based Jausas, which is also acting for "about 50" clients.
Smaller investors are thought to have been hardest hit in Spain. Among those are a retired school teacher who put half her savings into Mr Madoff's invesment plans via Optimal, Santander's fund management arm, and a street seller who put $400,000 of lottery winnings into the same fund.
Spanish lawyers, who hope to reach agreements with banks without going to court, are working with the US law firm Labaton Sucharow.
The American law firm cited Optimal as one of the "feeder funds" who channelled funds into Madoff Securities in return for what it calls "lucrative commissions".
"Labaton Sucharow is investigating whether these feeder funds conducted adequate due diligence before investing in Madoff in light of the multiple red flags that are now know to have been evident, including the absence of a serious or reputable auditor, the absence of an outside clearing agent, and the overly consistent returns," it said.
Santander faces loses of €17 million euros (GBP16m), but its clients were exposed to loses of €2.3 billion euros.
The Spanish bank reportedly praised Mr Madoff weeks before the disgraced financier was accused of the biggest fraud in corporate history.
Spain's anti-corruption prosecutor is investigating Santander and the BBVA bank to see if they acted corrrectly towards investors.
Mr Madoff is accused of running a massive pyramid scheme, using cash from new investors to fund payments to earlier clients.
A Santander spokesman declined to comment.
Oakland Lawyers , New York Banks
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