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Wells Fargo Says Clients Hurt by Madoff Cost Bank $294 Million
By Ari Levy
Jan. 28 (Bloomberg) -- Wells Fargo & Co. wrote off $294 million because Bernard Madoff’s alleged Ponzi scheme wiped out some of its customers and left them unable to pay their loans, said Chief Financial Officer Howard Atkins.
“This is not our exposure to Madoff, this is our exposure to customers of ours who had investments in Madoff,” Atkins said today in an interview after the company announced fourth- quarter results, which included the pretax charge tied to Madoff. “They’ve gone from being wealthy to not having any money,” Atkins said. He didn’t say how many were involved.
Madoff was arrested Dec. 11 and charged with securities fraud at federal court in Manhattan after allegedly telling his sons that his investment advisory business was a Ponzi scheme, in which early investors were paid with money from subsequent participants.
Madoff’s clients included banks, hedge funds, charities, universities and wealthy individuals who have disclosed about $41 billion invested with Bernard L. Madoff Investment Securities LLC, according to a Bloomberg News tally of disclosures and press reports.
Wells Fargo reported a fourth-quarter loss of $2.55 billion today after acquiring Wachovia Corp. and its default-plagued mortgage portfolio. The Madoff loss accounted for 5 cents of Wells Fargo’s 79-cent-a-share loss.
To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aANrsEiVm2Gg&refer=home
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