Fortis possible victim of US securities fraud

Fortis Nederland may have lost up to €1bn from its indirect involvement in the massive securities fraud allegedly perpetrated by American trader Bernard Madoff, the nationalised bank said on Monday evening.

While Fortis Nederland does not have any direct investments in Bernard Madoff Investment Securities, parts of the group have been exposed through secured loans made to third parties, the bank said in a statement. But Fortis will only be affected if these funds are unable to pay back the loans because of the fraud, the bank said.
The amount involved is between €850m and €1bn, Fortis said, stressing that the continuity of Fortis Nederland and its subsidiaries was in ‘no way’ in danger.

Worldwide exposure

Madoff was arrested on behalf of the US financial services watchdog SEC last week for his role in what is said to be a $50bn fraud. Banks and investment houses around the world have been detailing their exposure.
Spain’s Santander, which together with Fortis and Royal Bank of Scotland bought ABN Amro last year, is set to lose €2.3bn. RBS itself said its losses could run up to nearly $600m. ABN Amro said in a statement that part of that figure is its responsibility.
According to the Financieele Dagblad, SNS Reaal’s exposure to Madoff is negligible and ING was unable to state its position. Several Dutch investment funds and private investors are also affected, the paper said.

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