Proof Santander’s Optimal knew Madoff was dodgy!

In another good article by Bloomberg it emerges that Optimal had the Riskdata software that highlighted Madoff (and other frauds that emerged over the last few years). Riskdata have published a note pointing out their system would have been waving huge red flags in Optimal’s face. These would have been further passed on to senior [...]

Should Optimal investors have a Preference?

Santander has proposed a settlement to its Private Banking clients (it is not clear whether this applies to clients who owned Optimal products through other accounts). It is supposedly “for the principal amount invested, net of redemptions, in Optimal Strategic, which amounts to 1,380 million euros“. Returning investors’ original investments, albeit without compensating for interest [...]

Madoff Enablers Winked at Suspected Front-Running…

…is the title of a well researched article by Bloomberg that looks set to appear in the next edition of their magazine. It is highly critical of feeder funds such as Santander’s Optimal. To provide a few excerpts: The purported mission of such feeder funds was to vet hedge funds for wealthy clients. Instead, the [...]

Stormy meeting

Looks like Santander is coming under a bit of pressure from its own shareholders – Monday’s EGM was not exactly a friendly affair as Reuters reports…

More damning tidbits emerging

The mystery over when Santander realised that its Optimal employees were shovelling client money into a Ponzi scheme continues. A Financial Times article says that documents have emerged showing a naive and unquestioning admiration for Madoff by the “experts” at Optimal. What still is unclear is whether the November mission to New York was due [...]

Peekaboo – now you see me, now you don’t

The more time one has to dwell on the Madoff affair, the more one realises that feeder funds such as Santander’s Optimal, Bank Medici & co were not only negligent, but failed to apply the most basic common sense. For example, the whole process of Madoff insisting on total secrecy and not allowing his name [...]

Was it all the custodian’s fault?

There is an increasing likelihood that feeder funds will be going after the custodians of their Madoff vehicles, as this article suggests. Effectively the custodians were delegating the job of monitoring what was going on with the allocated money to a sub-custodian, which was Madoff himself. So Madoff would tell  them that there was $1bn [...]

Santander under investigation from prosecutors over Madoff

It will not come as a major surprise to readers of this blog that Spanish prosecutors are reportedly probing Santander’s role in perpetuating Madoff’s fraud. According to the WSJ (subscription only), they are focussing on 3 key issues: 1) Links to Fairfield (who lost $7.5bn of client money) via Mr Piedrahita, a Colombian living in [...]

The man behind Santander’s Optimal Strategy… already has another job

Further to yesterday’s post on who the real winners in Madoff are, it transpires that the people who built Santander’s Madoff business had already gone off to get new jobs.  Manuel Echeverria, the CEO and CIO of Optimal Investment Management and a team of his four top “geniuses” left Optimal in September ’08 to move [...]

Santander’s Optimal Strategy with Madoff – plain dumb or crooked?

“So we lost your $3.6bn in a fraud. Sorry guys, but we are also victims here – we’ve lost $17m” – that’s pretty much Santander’s line so far to investors in Optimal Strategic US, its feeder fund into Madoff. Does the “innocent victim” line stand up to scrutiny? Optimal Investment Services (redesigned post-Madoff) website still [...]