ECONOMY

Greeks hurt in Madoff scandal

Greek investors have more than $1 billion (724 million euros) in exposure to the alleged fraud by New York broker Bernard Madoff, according to market sources. Madoff, a 70-year-old Wall Street veteran who was arrested last week, is alleged by US prosecutors to have confessed to having defrauded investors of $50 billion in a giant pyramid scheme that collapsed amid the global financial crisis. Among the Greek-owned funds most heavily involved with Madoff was Fix Asset Management (FAM), a company set up by the Fix family, known for its brewery business. «Like many of the world’s leading financial institutions, FAM is shocked by Madoff’s complex scheme,» the company said in an announcement. «In the wake of this collapse, the affected funds serviced by FAM are committed to aggressively pursuing the recovery of all assets related to Bernard L. Madoff Investment Securities,» it added. FAM started off in the mid-1980s with capital in the tens of million of euros that has since grown to 400 million euros. A number of wealthy Greek families, from the shipping, banking and the food industry sectors, are believed to have invested money with Madoff via FAM. According to sources, investors who have taken legal action to recover their money have only managed to obtain 10 to 15 percent of the capital invested. US authorities allege that Madoff delivered consistently strong returns to clients by secretly using the principal investment from new investors for payments to other investors in what is known as a «pyramid» fraud. The scheme apparently worked as long as Madoff could attract new investors but seems to have unraveled when some of his clients asked to withdraw their investments – only to discover that the seemingly brimming coffers were empty. Others firms that have invested in his fund include such major European banks as HSBC Holdings Plc, Banco Santander, BNP Paribas and Royal Bank of Scotland Group Plc.