Agreement
Madoff investors, banks settle for $15.5 billion, lawyers say
Banks agreed to pay about $15.5 billion to settle claims by about 720,000 investors outside the U.S. who lost money in Bernard Madoff's fraud, according to a group of law firms that represent victims.
About 80 percent of the clients represented by the firms are covered by the settlements, said Miguel Larios, a senior associate at Cremades & Calvo-Sotelo. The Madrid firm last year helped set up a network of lawyers that were taking on Madoff- related complaints. The New York Times reported the settlement agreement yesterday.
Banco Santander SA, Spain's biggest lender, last year offered compensation in the form of preferred shares paying 2 percent interest in an attempt to repair relationships with private banking clients who lost 1.38 billion euros ($1.7 billion) on Madoff-linked products Santander sold them.
European banks have come under increased pressure since Madoff's arrest as investors in France, Ireland and Luxembourg have sued seeking repayment of losses. UBS AG and HSBC Holdings Plc, Europe's largest bank, are together facing more than 100 investor complaints for allegedly failing in their duties as custodians for European Union-regulated funds.
"We have never, ever heard of these settlements," Edouard Fremault a senior analyst at Deminor International, which advises some 1,200 investors in Europe who lost money invested with Madoff, said in a telephone interview. "We are a bit skeptical. I am certain that there’s been no deal in France, Belgium, Luxembourg or the Netherlands."
Javier Cremades, chairman of Cremades & Calvo-Sotelo and president of the law firm network will hold a news conference in New York today to talk about the settlements, Larios said.
(Published by Bloomberg – May 25, 2010)