Banco Santander Seeks to End U.S. Lawsuit Over Madoff Losses

Banco Santander Seeks to End U.S. Lawsuit Over Madoff Losses - 11/20/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Banco Santander Seeks to End U.S. Lawsuit Over Madoff Losses
Erik Larson

Bloomberg. November 20, 2009
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EXCERPT: Banco Santander SA, the Spanish bank that lost about $3.2 billion in Bernard Madoff’s fraud, asked a court to dismiss a lawsuit against it over the losses, saying investors who sued failed to link the bank to any wrongdoing. Santander said in papers filed in federal court in Miami that it was duped by Madoff and that shareholders in two funds that invested with the con man can’t sue the bank directly. The suit is a proposed class action to include all Santander customers in Latin America who lost money in the Madoff Ponzi scheme. “Defendants’ failure to detect Madoff’s fraud was not due to their intentional or severely reckless failure,” Santander said in the Nov. 18 filing. “The far more likely, and hence plausible, inference is that defendants, like thousands of other sophisticated investors around the world, genuinely believed Madoff.” Santander said that at least some investors can’t sue in the U.S. because their account agreements require disputes to be resolved in the countries where accounts are located, such as Switzerland and the Bahamas. The investors’ lawyer, Javier Bleichmar of Labaton Sucharow LLP in New York, declined to comment. Santander is accused in the lawsuit filed on Jan. 26 of failing to protect investors in funds managed by its Geneva- based Optimal Investment Services unit after discovering in 2002 that Madoff deviated from industry standards by acting as custodian of his own funds. Madoff, 71, pleaded guilty in March and is serving a 150-year sentence. Madoff Meetings After Santander and Optimal Investment met with Madoff on Sept. 18 and Sept. 19 in 2002, they revised prospectuses for two Optimal funds that invested with Madoff to say there was a “possibility” or “risk” that he could abscond with the assets, the investors said Oct. 21 in a 229-page amended complaint.

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