Clients exposure to Madoff

RNS Number : 1002K

Banco Santander S.A.

14 December 2008

 



MATERIAL FACT 

Regarding the action by the United States Securities and Exchange Commission (the “SEC”) towards the company Bernard L. Madoff Investment Securities LLC (“Madoff Securities”), Grupo Santander communicates that:

1.      Optimal Investment Services (“Optimal”) is the Grupo Santander asset manager that specializes in the management of alternative investment funds and institutions. Among the institutions managed by Optimal is Optimal Multiadvisors Ireland plc (“Optimal Multiadvisors”), an alternative investment company established in Ireland and authorized by the Irish Financial Services Regulatory Authority (“IFSRA”).

 

2.      Optimal Multiadvisors has a subfund, called Optimal Strategic US Equity (“Optimal Strategic”). Madoff Securities was commissioned by Optimal to execute its investments within the framework Optimal established for this fund.

 

3.      Madoff Securities is an authorized broker-dealer, registered and supervised by the SEC and is authorized as an investment advisor by the Financial Industry Regulatory Authority (“FINRA”) of the U.S.

 

4.      The custodian of Optimal Multiadvisors and of Optimal Strategic is HSBC Institutional Trust Services (Ireland) Limited, of the HSBC Group.

 

5.      The exposition of Grupo Santander clients in Optimal Strategic is EUR 2.33 billion, of which EUR 2.01 billion belong to institutional investors and international private banking customers. The remaining EUR 320 million, the large majority of which are structured products partially indexed to the performance of Optimal Strategic, are part of the investment portfolios of the Group private banking customers in Spain, who are qualifying investors.

 

6.      Grupo Santander has a proprietary position of EUR 17 million through another investment fund.

 

7.      Optimal will undertake the legal actions which may be needed to defend the interests of shareholders in the subfund.

 

Boadilla del Monte (Madrid), December 14, 2008 

 

END

 

 

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