Brokers in EU urged to help Madoff-hit investors - Pressure on Investment Advisors after fraud

Brokers in EU urged to help Madoff-hit investors
Wed Feb 4, 2009 10:33am EST
BRUSSELS, Feb 4 (Reuters) - European Union market watchdogs said on Wednesday that financial institutions should help clients caught up in Wall Street's Madoff scandal.

The Committee of European Securities Regulators (CESR) is made up of all the national market regulators in the 27 nation EU and aims to coordinate supervisory actions.

"It seems likely that some European investors will experience financial losses, either directly or indirectly, due to the alleged fraud of Bernard Madoff," the committee said in a statement.

Madoff, once a respected money manager, was arrested Dec. 11 and is accused of carrying out a $50 billion fraud. Authorities say he has confessed to running a massive Ponzi scheme, a scam in which earlier investors are paid with money deposited by newer ones.

"CESR also takes this opportunity to urge those acting on behalf of investors to proactively communicate the steps they are taking to recover funds and any information on next steps," the statement said.

CESR said it was seeking to establish the extent of potential losses for European investors and coordinate EU member state actions.

The committee said it was also in talks with the Securities and Exchange Commission which oversees U.S. securities markets to ensure regulatory resources are used as effectively as possible.

CESR will also look at how EU rules on safekeeping of assets are applied across the bloc.

The committee said all claims should be filed with the SEC by March 4 and offers advice to different types of investors on its website www.cesr.eu

In the United States this week clients of Spain's Banco Santander (SAN.MC) asked a U.S. judge to scuttle its plan to compensate customers for losses linked to Madoff, saying it falls far short of a bigger potential payout.

(Reporting by Huw Jones, editing by Elaine Hardcastle)