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By the Opalesque Team: Optimal Investment Services, the Geneva-based subsidiary of the Santander banking group, invested CHF3.5bln in Madoff. Swiss daily newspaper Le Temps investigated.

Optimal employs 73 people, 45 being based in Geneva. Their role is to direct $9bln (of which four fifth comes from Santander’s wealthy Spanish and South American clients) towards the very best investment funds. One of the flagship funds, the Strategic US Equity fund, manages $2.8bln which was invested in Madoff. In Europe, this fund was one of the most reputable access to New York’s financial universe. Commission fees for that fund brought in more than $52m in 2007.

Optimal products, which are more profitable than competitors’, were also sought-after by investors from outside the Santander group, some of whom were Genovese wealth managers who then advised their clients. If the later came only for the ‘Wall Street magician’, Madoff’s name did not appear in the subscription documents. But the annual report stated that it delegated all investments decisions to Madoff. One line warned of the possibility of fraud: all stocks are with one broker, and there is therefore the risk that he might run away with them…

But subscribers wanted Madoff, Le Temps reported. They were reassured by PricewaterhouseCoopers being the controller. And by Optimal’s chief résumé: Manuel Echeverria founded and run for more almost 20 years the alternative......................

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