Tremont hedge 'loses $3.3 bln in Madoff scandal' - Tremont hedge 'loses $3.3 bln in Madoff scandal'

Tremont hedge 'loses $3.3 bln in Madoff scandal'

WASHINGTON (AFP) - US hedge fund Tremont Group Holdings invested 3.3 billion dollars with Bernard Madoff, the disgraced investment manager accused in a massive fraud, a source familiar with the matter said Monday.

Tremont, a subsidiary of Oppenheimer Acquisition Corporation, part of insurance giant MassMutual, indicated it had exposure to the Madoff scheme but did not disclose any amounts.
A source familiar with the matter, however, confirmed reports that the exposure was 3.3 billion dollars.
Madoff, 70, has been charged in connection with a fraud that could reach 50 billion dollars, of which about 60 percent has been identified by specific investors.
US authorities allege that Madoff secretly used money from new investors to pay interest to other investors, in a fraud known as a Ponzi or pyramid scheme. The collapse has shaken financial institutions worldwide and hit big-name investors.
"This fraud claimed thousands of victims, Tremont among them," Tremont spokesman Montieth Illingworth said. "It was designed and executed to deceive individuals and institutions alike."
Tremont was "focusing on recovering our clients' assets and are in contact with law enforcement and the SEC regarding their investigations," Illingworth said.
The Securities and Exchange Commission (SEC) last week announced a probe into how the financial regulatory body failed to detect the alleged fraud scheme despite a decade of warning signs.
Tremont is said to be the second largest victim in the scandal after asset manager Fairfield Greenwich Group's 7.5 billion dollars exposure.
Only about 60 percent of exposures to the Madoff scandal have been identified so fa