Banco Santander offered 1.3 billion euros ($1.7 billion) to reimburse clients who lost money related to the $50 billion fraud that the New York financier Bernard L. Madoff has been accused of orchestrating.

Santander Reimburses Clients Who Lost Money With Madoff
MADRID (AP) — Banco Santander offered 1.3 billion euros ($1.7 billion) to reimburse clients who lost money related to the $50 billion fraud that the New York financier Bernard L. Madoff has been accused of orchestrating.

Banco Santander SA

Banco Santander, Spain’s largest bank, was one of the institutions hardest hit in the scandal. It has said it has total exposure of 2.3 billion euros ($3 billion) in the case, the vast majority of it client money. The bank said it was offering the compensation to private customers and made no mention of institutional investors.

The bank has been sued in Miami by investors who say it did not adequately scrutinize the investments made with Mr. Madoff.

The lawsuit, filed in federal court Monday, claims Banco Santander was negligent, contending there was a “plethora of red flags” that should have alerted the bank that Mr. Madoff was running what the lawsuit says was a Ponzi scheme. The suit seeks class-action status.

The bank said in a statement on Tuesday that it acted with “due diligence.”