Some of the world's biggest banking institutions and hedge funds reported potential huge losses on Monday as the impact of alleged fraud by arrested Wall Street investment manager Bernard Madoff spread far beyond U.S. borders, according to the Associated Press.
Britain's Royal Bank of Scotland Group and Man Group, Spain's Grupo Santander SA, France's BNP Paribas and Japan's Nomura Holdings all reported that they had fallen victim to Mr. Madoff's alleged $50 billion Ponzi scheme.
The extent of the potential damage, stretching also to several U.S. charities who invested funds, prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier, the AP reported.
Among those confirming exposure on Monday, Banco Santander, the largest bank in the euro zone by market capitalization, said its clients have euro2.33 billion ($3.07 billion) in exposure with Mr. Madoff, mostly through a fund called Optimal Strategic U.S. Equity, according to the report.
Royal Bank of Scotland — Britain's second-largest bank, which is now 58% owned by the British government — said it could lose around $600 million through exposure in trading and collateralized lending to funds of hedge funds invested with Bernard L Madoff Investment Securities.
Man Group, the world's largest publicly traded hedge fund manager, said its risk came through two funds that are directly or indirectly sub-advised by Mr. Madoff Securities through RMF, its predominantly institutional fund of funds, the AP said.
"RMF will continue to monitor and evaluate the situation on behalf of its investors and will take appropriate steps to seek recovery of investor assets," Man Group said in a statement.
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