Spanish Bank Seeks Settlement With Its Customers in Madoff-Related Case
Sued by private banking clients who contend the Banco Santander SA was grossly negligent in investing their money in an alleged $50 billion Ponzi scheme of which Bernard Madoff is accused of being the architect, the Spanish bank is reportedly seeking to settle with its customers.
The proposed deal, which would be the first settlement by a financial company in connection with the claimed Madoff scheme, calls for Santander to return clients’ original investments to them, via Santander preferred stock paying 2 percent interest annually. In exchange, the private banking clients would have to promise not to sue and agree to keep their current business at the bank, reports the Wall Street Journal (sub. req.).
Although Santander contends it complied with banking laws and followed appropriate banking practices, the bank was sued Monday in federal court in Miami.
Cremades & Calvo-Sotelo, a Spanish law firm, is representing the plaintiffs in the class action along with New-York based Labaton Sucharow, Bloomberg reports. Joel Bernstein of the Labatron firm and attorney Michael Hanzman of Hanzman Gilbert in Coral Gables, Fla., are on the pleadings, according to the Miami Herald.
The Santander settlement offer does not apply to institutional investors.
Additional coverage:
BBC: “Madoff victims offered settlement”
ABAJournal.com: “Spanish Prosecutors Probe Bank’s $3.1B Client Losses to Madoff”
