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From The Opalesque Team:

The ripples keep forming, as a second generation of investors find themselves once removed from the Madoff fraud, yet still losing money from it. Ohio-based bank KeyCorp announced its second quarter earnings on Wednesday, including a $23m loss from discontinuing operations of former subsidiary firm Austin Capital Management.

KeyCorp informed its shareholders of a $0.69 per share loss of which over 7% ($0.05) was attributed to losses the bank suffered by closing down Austin Capital Management. "In April, 2009, Key made the strategic decision to curtail the operations of Austin Capital Management, Ltd, an investment subsidiary that specializes in managing hedge fund investments for its institutional customer base." Said the bank in the earnings release. (Available here: Source)

Austin Capital was one of the fund of hedge funds that suffered losses from investments in the Madoff fraud. According to industry reports, the firm had invested approximately 7.5% of its funds into Madoff managed investments. The firm and its management team have been subject to several lawsuits including from a New Mexico teacher's union, a Pennsylvania pension fund, and a class action suit from multiple investors.......................

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