Banco Santander agrees to pay $235 to settle claims with Madoff trustee
This settlement would also increase the amount Picard has recovered for distribution to investors to a total of $1.2 billion. Most of the other funds recovered so far have come from Madoff 's business and personal assets.
Santander ran the Optimal Investment Services Fund, which primarily included clients from Latin America. Santander is one of several banks that offered its clients compensation for loses from the fraud. Santander reported in April, that 93 percent of its clients affected by the Madoff scandal accepted its offer, which was originally valued at 1.38 billion euro.
Santander, which is one of Europe's largest banks, had about $3 billion of its clients' money invested through Madoff for which it earned about $100 million in management fees in 2006 and 2007 combined. Santander reports it lost $23.8 million of its own money in Madoff investments.
Court papers filed with the settlement show that Santander is a net loser. Since the bank opened accounts with Madoff in 2006 and 2007, they deposited $1.5 billion beyond what they took out in redemptions. But Optimal withdrew about $275 million in the 90 days before the Madoff scandal broke on December 6. That withdrawal is recoverable under bankruptcy law.
Picard just started to target individual investors who made profits investing with Madoff. He believes in several of these instances defendants "should have known" about the fraud. Some defendants dispute these allegations, while others haven't yet responded.
Lita Epstein has written more than 25 books including Reading Financial Reports for Dummies.