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Pensions and mortgages to suffer as Madoff scam hits HSBC, RBS and others

17 December 2008 / by None
Experts have warned that the $50billion US scam run by Bernard Madoff could soon hit Brits too, as RBS, HSBC and other financial institutions confess to being duped.

The news of Bernard Madoff's Ponzi Pyramid scheme swindle emerged last week as it came to light that his renowned return on investments was actually funded through new investors' cash.

Since then, UK financial institutions have come out of the woodwork and confessed to having money invested in the rogue's 'hedge fund'. RBS released a statement saying:

"If as a result of the alleged fraud the value of assets of these hedge funds is nil, RBS's potential loss could amount to approximately £400million."

In addition, worldwide bank HSBC confessed to having invested in funds with Madoff, "On the basis of information presently available, HSBC is of the view that the potential exposure under these financing transactions is in the region of US$1billion," a statement revealed.

Reports also suggest that insurance specialist AXA and a number of local authority pension schemes have also been hit by Madoff's scandal, putting a number of Brits' pensions at risk.

Merseyside Pension Fund, a local Government pension, is believed to have been hit, as one of its Fund's asset management companies Bramdean is believed to have invested 9.5 per cent of £21million with Madoff.

Experts have also predicted that repossessions could rise and that mortgage lending will be affected as well as pensions as a result of Madoff's actions.

It is thought that Mandoff's sons blew the whistle on his actions; both deny any knowledge of their father's actions, despite working at the family firm.

© Fair Investment Company Ltd