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Spain suffers financial fraud fall-out

Spain suffers financial fraud fall-out
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In Spain, investors are contemplating the loss of up to three billion euros in funds managed by the rogue Wall Street trader Bernard Madoff. A hedge fund run by Spain’s largest bank, Santander, could be wiped out. Madoff’s suspected 36 billion euro fraud is set to hit fortunes large and small, worldwide.

“We were told that it was the biggest investments which could collapse but not ours. Now they have gone down too,” said one man among protesters outside a branch of Santander bank in Madrid.

However, a spokesman for Spain’s second largest bank BBVA said its customers in Spain would not lose out because of the fraud, even though the bank did have investments in the same hedge fund.

Miguel Angel Fernandez Ordonez, the Governor of the Bank of Spain, said: “We are talking about 36 billion euros. It is a ridiculous sum when one compares it with losses caused by nonfraudulent acvtivities.”

The shock waves are reverberating worldwide as international charities, pension funds and banks, many of them European, disclose how much they may have lost as a result of the Madoff fraud. The now arrested former Nasdaq stock market chairman stands accused of running a pyramid type “ponzi scheme” paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than real profit.