Santander Raises Madoff Compensation: Report
Banco Santander quietly raised a compensation deal for clients that lost money in the alleged Ponzi scheme run by Bernard Madoff, The Wall Street Journal reported Monday.
Santander, the No. 2 European bank by market capitalization, is now offering incentives to wealthy clients, with preferred shares used as collateral for a loan charging 3 percent annual interest, the Journal said.
The loan could be taken in cash or reinvested in bond paying 6 percent interest and would amount up to 85 percent of the original investment in Madoff funds, the paper reported.
In January Santander became the first and only bank to offer clients some compensation, offering preferred stock paying an annual interest of 2 percent, but that was considered inadequate, the Journal said.
In addition Santander also offered to let Madoff-affected clients move their bank accounts from Santander and still be eligible for the preferred stock swap.
About 75 percent of the clients have already signed up for the offer, according to the paper.
Officials at Santander were not immediately available for comment, but a spokesman told the Journal the January offer "is not going to change."