Santander Offers Madoff Settlement, Shutters Hedge Funds

Jan 28 2009 | 2:10am ET

The fallout from the Bernard Madoff scandal continues at Spain’s largest bank, which said yesterday it would close several hedge funds burned by Madoff and seek to settle Madoff-related claims made against it.

Santander said it would offer €1.38 billion (US$1.82 billion) to clients who lost money in the alleged US$50 billion Ponzi scheme. Santander was sued Monday in Miami by investors who accuse it of due-diligence failures in its Madoff investments. The bank’s hedge fund unit, Optimal Asset Management, has acknowledged some €2.3 billion (US$3 billion) in exposure to Bernard L. Madoff Investment Securities, the bulk of it client funds.

The bank made the offer only to individual, and not institutional, investors. Santander said it will return only a client’s initial investment, in the form of preferred securities with an annual payout of 2%. In a statement, the firm said it “acted at all times with due diligence” and “in accordance with all applicable laws.”

Simultaneously, Optimal said it would liquidate seven of its hedge funds and return the money to investors.

“Adverse market conditions have produced a significant increase in the number of redemption orders in some of the funds,” Swiss-based Optimal said in statement. “If these redemptions take place, assets under management would drop substantially.”

Optimal said it would close its Asian Opportunities, Arbitrage, European Opportunities, Global Opportunities, Global Trading, Multi-Strategy and U.S. Opportunities funds.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Scene Last Night: Clinton, Schwarzman, Corzine, Neidich, Diamond

Nov 25 2014 | 5:52pm ET

Steve Schwarzman had a granddaughter yesterday morning. Last night he sat one table...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.