http://www.theaustralian.news.com.au/story/0,25197,24800695-5017997,00.html<snip>
TWO months after being hammered by the collapse of Lehman Brothers, banks and investment funds in Europe are trembling in the face of the massive fraud allegedly perpetrated by New York broker Bernard Madoff.
Spain's largest bank Santander said customers of its hedge fund Optimal have an exposure of €2.33 billion ($4.7 billion) to the alleged fraud committed Mr Madoff.
The bank, Europe's second largest by market capitalisation, also said it had invested €17 million of its own funds in Madoff products.
“The exposure of Santander customers in Optimal Strategic is €2.33 billion, of which €2.01 billion is from institutional investors and customers from private international banking,” it said in a statement.
Mr Madoff was arrested last week for allegedly defrauding his customers through a giant pyramid scheme, with prosecutors alleging that the 70-year-old, a decades-long veteran of Wall Street, confessed to losing at least $US50 billion ($75 billion) in the so-called Ponzi scheme.
Mr Madoff's company, Bernard L. Mr Madoff Investment Securities, attracted “the world's financial aristocracy,” said the Spanish newspaper El Pais.