Investors conned by Madoff to be reimbursed by banks

City A.M. Reporter
AROUND 20 European banks including HSBC have agreed to reimburse non-US investors for $15.5bn (£10.8bn) of losses from convicted swindler Bernard Madoff’s Ponzi scheme.

Javier Cremades, who helped create a legal network to pursue investor complaints about Madoff, said lenders in France, Germany, Portugal, Spain and the United Kingdom are among the settling banks. Lenders in Switzerland have resisted in part because of that country’s bank secrecy laws, he said.

“They feel very protected, and many investors outside have nondeclared money,” Cremades, president of the Madrid law firm Cremades & Calvo-Sotelo said yesterday. “The Swiss system is the toughest one.”

Yet he said settling ought to be “not expensive at all” for lenders that might otherwise face a “huge reputational issue” by holding out, “at a time confidence is not in abundance.”

Differing disclosure rules may explain why some banks do not reveal payouts, as they might in the US.

Santander has admitted its clients may have lost €2.33bn (£2bn) with Madoff. HSBC spokesman Andrew McNamara declined to comment.

US victims have been less successful recovering funds.