A.Wayne

Santander seems to be out 3.1 Bn , hopes this does not affect there F1 participation..


http://news.bbc.co.uk/2/hi/business/7782731.stm



Two major European-based banks said they have exposure worth billions of dollars to a US broker accused of a $50bn (£33bn) Wall Street fraud scheme.

Spain's largest bank, Santander, said one of its funds had $3.1bn invested in the firm run by Bernard Madoff.

France's largest listed bank, BNP Paribas, estimated its exposure to be more than $460m.

Mr Madoff has been charged with fraud, in what is being described as one of the biggest-ever such cases.

Correspondents say the case is likely to fuel uncertainty about the entire hedge fund industry.

'Systemic failures'

Mr Madoff is alleged to have used money from new investors to pay off existing investors in the fund.

Investors are assessing their exposure to the alleged fraud Mr Madoff is said by prosecutors to have confessed to.

US Prosecutors say Mr Madoff, a former head of the Nasdaq stock market, masterminded a fraud of massive proportions through his hedge fund and investment advisory business.


The collapse of Madoff is likely to accelerate the disappearance of hedge funds
Robert Peston

Read Robert Peston's blog

A federal judge has appointed a receiver to oversee Mr Madoff firm's assets and customer accounts, while the 70-year-old banker has been released on $10m bail.

"While BNP Paribas has no investment of its own in the hedge funds managed by Bernard Madoff Investment Services, it does have risk exposure to these funds through its trading business and collateralised lending to funds of hedge funds," BNP said in a statement.

Santander said its exposure to Madoff was through its investment fund Optimal.

UK-based asset management firm Bramdean Alternatives accused US regulators of "systemic failures".

The firm saw its share value drop by over 35% after it revealed that about £21m - nearly 10% of its holding - was exposed to the New York broker.

"It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith," the firm said.

"The allegations made appear to point to a systemic failure of the regulatory and securities markets regime in the US."

High returns promised

Mr Madoff founded Bernard L Madoff Investment Securities in 1960, but also ran a separate hedge fund business.

Investors have withdrawn from hedge funds amid market volatility.

According to the US Attorney's criminal complaint filed in court, Mr Madoff told at least three employees on Wednesday that the hedge fund business - which served up to 25 clients and had $17.1bn under management - was a fraud and had been insolvent for years, losing at least $50bn.

He said he was "finished", that he had "absolutely nothing" and that "it's all just one big lie", and that it was "basically, a giant Ponzi scheme", the complaint said.

He told them that he planned to surrender to the authorities but not before he used his last $200m-$300m to pay "selected employees, family and friends".

Under a Ponzi scheme, which is similar to pyramid schemes, investors are promised very high returns on their investment, while in reality early investors are paid with money collected from later investors.

If found guilty, US prosecutors say he could face up to 20 years in prison and a fine of up to $5m.

171mph

If its a fund then it's likely Santander's clients (the investors) who are out the money. But you bring an interesting point - how badly with F1 be hurt by direct sponsorship leaving - especially banks (ie RBS and williams - RBS as you know had a gov't bailout earlier this year).

There was also an interesting article on Nascar sponsorship in todays NYT:

http://www.nytimes.com/2008/12/14/bu...=nascar&st=cse

"Chevrolet has said it is cutting back on advertising and sponsorship deals with 12 tracks. Ford is trimming Nascar spending by 20 percent, and Chrysler by 30 percent."

A.Wayne

Yes the real effect will not show it's head until jan/feb .. There are a lot personnel floating around in the last 2 months , the racing scene is taking a bigger beating than is being let on by the press .

ltc

I'm going to have to come to McLaren's defense here and say that the $3.1 billion charged for psychiatric care for the team after working with Miss Alonso was money well spent.
Personally I would have thought the figure to be higher, given the # of people involved (not including Miss Alonso's many personalities)

ZAPmobile

Like I said in another thread, no sponsorship no racing. This is going to be a terrible year for pro racing.

Veloce Raptor

Wayne, FYI, it's "McLaren", not "McClaren".

multi21

Forget about McLaren, how will this impact Santander's sponsorship deal with Ferrari? Could this be the one saving grace that prevents Alonso from going to F? There is hope in this holiday season.

ltc

Sir A.Wayne will solicit internet donations, sell internal organs....whatever it takes to make sure Miss Alonso drives for Ferrari.....there is serious 'face' at stake here.

A.Wayne

At lunch last week , both FA and Flav felt Ferrari will be left behind by the time KERS is in , so FA is not too keen on the Ferrari deal at the moment .. Also with there current driver lineup , FA and Renault are the favorite's for next years WDC with their main threat coming from Lewis and McClaren.

FA did admit that Ferrari will be strong next year, but feel him and Lewis will be able to out driver Kimi for sure Massa less so and do expect to give up races to them , but will rpevail in the end. Al Gore has confirmed an even wetter year of racing in 09......

ltc

Check me if I'm wrong here, but by the time KERS is in (re: mandatory), won't that be the 'standardized KERS' to go with the 'standardized engine/transmission'?

Lunch with Flav and FA....I hope VR offered to pick up the check.
Any pictures from the lunch?

A.Wayne

VR! I heard VR was in iraq , throwing his shoes @ Bushy !

Flying Finn

You're more and more like Lindsey Lohan trying to decide whether to suck dick or eat *****...

A.Wayne

Was that before or after you paid your debts

Flying Finn

Before AND after...

BTW, we need to set up a "handoff", PM me so we can go to a lunch in South Beach or maybe dinner is better if you're planning on opening up a bottle so that we can sample...