Product Liability Attorney Blog

Victims who had hoped to recoup $50 billion worth of losses from the sale of Bernard Madoff’s brokerage will likely be disappointed by a report that estimates the brokerage will fetch no more than $10 million.

According to Bloomberg News, a profit report prepared by investment bank Lazard Ltd. concluded that the brokerage earned only $1.12 million last year. In addition, the brand is now tarnished because of the alleged Ponzi scheme that cost investors billions of dollars.

Recently, The Wall Street Journal compiled an extensive list of Madoff’s most over-exposed investors. In addition to those mentioned in our previous posting, some of the charities, hedge funds and banks that could sustain staggering losses include:

The British bank Royal Bank of Scotland Group PLC which had a potential exposure of almost $500 million as a result of trading through Madoff and collateralized lending to funds of hedge funds.

BNB Paribas, a French bank, could lose up approximately $430 million through its trading business and collateralized lending to funds of hedge funds.

Spanish bank BBVA could lose almost $370 million if Madoff funds were not found to exist.

Man Group PLC, a U.K. hedge fund, estimates it could lose $360 million as a result of investing directly in Madoff funds and indirectly sub-advised by Madoff Securities and for which Madoff acts as a broker-dealer.

Continue reading " Sale of Madoff Brokerage Won't Reimburse Investors " »

Glenn and Norma Linke, a retired couple living in St. Louis, thought their money had been invested safely. But last year, when they asked their broker at Stifel Nicolaus to sell their “weekly CDs” in order to pay the costs of building a first-floor bedroom, they were in for an unpleasant surprise. Their money had not been used to purchase certificates of deposits. Instead, it had been invested in auction rate securities that could not be sold.

The St. Louis Post-Dispatch reported on the plight of the Linkes last Sunday. Nearly a year after the auction-rate securities market froze the Linkes still cannot access approximately $75,000 of their money.

The Missouri Secretary of State negotiated buy-back agreements with Wachovia Securities in St. Louis and Commerce Bank. But Stifel, the third-largest brokerage based in St. Louis, wasn’t part of the deal.

According to the article, “St. Louis couples angry at Stifel Nicolaus over auction rate securities,” Stifel claims it has done nothing wrong. Other regional brokerages such as Raymond James Financial are taking a similar position.

As a result, thousands of investors like the Linkes are still unable to retrieve their hard-earned money.

Continue reading " Auction-Rate Securities Investors Continue to Struggle " »

Spain’s anticorruption prosecutor is investigating how that country’s largest lender, Banco Santander, lost money through Bernard Madoff’s alleged fraud.

Santander, which is also the owner of U.S.-based Sovereign Bancorp, could lose $3.1 billion as a result of the alleged Ponzi scheme.

According to the Wall Street Journal, the probe was launched last month. Investigators are examining the relationship between Santander, the investment fund Fairfield Greenwich Group, and Madoff.

As the WSJ reported last week, Fairfield Greenwich could lose $7.5 billion in Madoff fund investments. Other charities, hedge funds and banks that invested money with Madoff and now face potential losses include:

HSBC, a British bank, provided financing to a small number of institutional clients who invested with Madoff. HSBC’s potential loss exposure is $1 billion.

French investment bank Natixis SA indicated that while it did not directly invest with Madoff funds, some investments made on behalf of its customers could have ultimately wound up with Madoff. Natixis could lose $554 million.

Carl Shapiro, an entrepreneur and investor, personally lost approximately $400 million in the alleged fraud. His charitable foundation, Carl and Ruth Shapiro Family Foundation, lost an estimated $100 million.

Continue reading " Spanish Prosecutor Probes Investor Fraud " »

A federal judge is expected to announce at noon today whether he will revoke Bernard Madoff’s bail, Bloomberg News reports. While Madoff, the alleged perpetrator of a $50 billion fraud, wonders whether he’ll go to jail, his investors wonder whether they’ll recoup any of their money.

Last week, The Wall Street Journalcompiled an extensive list of Madoff’s most over-exposed investors. In addition to those mentioned in our previous posting, some of the charities, hedge funds and banks that could sustain staggering losses include:

Banco Santander, a Spanish bank, could face up to $2.9 billion or 2.33 billion euros in losses. Of that amount, 2.01 billion euros belongs to institutional investors and 320 million belongs to private investors.

The Austrian bank, Bank Medici, had two funds with $2.1 billion invested with Madoff’s firms. The bank’s hedge funds reportedly had almost all of their money invested with Madoff.

Access International Advisors possible exposure amounts to $1.5 billion. The firm’s co-founder Thierry Magon de La Villehuchet was found dead of an apparent suicide last month. He lost about $50 million in the alleged Ponzi scheme.

Union Bancaire Privee, a Swiss bank, had approximately $700 million in investments related to Madoff including one run by J. Ezra Merkin.

Continue reading " Potential Losses Mount for Madoff’s Most Exposed Investors " »

The Wall Street Journal has compiled a comprehensive list of investors that plowed money into Bernard Madoff’s $50 billion alleged fraud scheme.

Over 100 investment companies, hedge funds, banks, charities and individuals are identified as well as the exposure each investor is facing. Some of the companies that invested their clients’ money with Madoff now stand to lose a great deal.

More than half of Fairfield Greenwich Advisors $14.1 billion in assets was connected to Madoff. That means it could face a loss of $7.5 billion.

Tremont Group Holdings, an investment firm owned by OppenheimerFunds and Massachusetts Mutual Life Insurance Co. could face a loss of$3.3 billion.

The hedge fund Ascot Partners invested substantially all of its assets with Madoff and could lose $1.8 billion.

Asset manager Bramdean Alternatives faces $31.2 million in loss exposure.

The pain isn’t just contained to the United States. The global list includes Swiss, French, Japanese, Dutch, Italian, Israeli, Belgian, Portugese, and Singapore-based companies.

Continue reading " Madoff’s Investor List " »