Spain investigating Santander over Madoff: report

A man walks past a Santander bank branch in central Madrid December 15, 2008. REUTERS/Susana Vera

NEW YORK (Reuters) - Spanish prosecutors are investigating Banco Santander’s loss of more than 2.3 billion euros of its clients’ money by investing with alleged swindler Bernard Madoff, The Wall Street Journal reported on Monday.

The newspaper said Spain’s anticorruption prosecutor would examine the relationship between Santander, Fairfield Greenwich Group, and the Madoff funds, citing the prosecutor’s office. Fairfield Greenwich Group is an investment fund, whose clients stand to lose $7.5 billion in the alleged $50 billion Ponzi scheme.

According to the Journal, investigators are looking into why Santander Chairman Emilio Botin sent his head of risk management operations to visit Madoff weeks before the scheme fell apart.

Investigators are also looking into whether several people who managed money at Santander funds were aware of problems at the Madoff funds.

U.S. prosecutors and regulators have accused the 70-year-old Madoff, founder of Bernard L. Madoff Investment Securities LLC and a former chairman of the Nasdaq Stock Market, of masterminding a fraud of epic proportions through his investment advisory business, which managed at least one hedge fund.

Santander could not be immediately reached for comment.

Reporting by Michael Erman; Editing by Bernard Orr