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article imageGeneva suffers deeply from $50-billion Bernard Madoff swindle

By Adriana Stuijt     Feb 11, 2009 in Business
The Swiss banking world in Geneva has been hardest hit by accused Wall Street swindler Bernard Madoff. Home to more than 140 investment banks and 600 independent investment funds, a full 34,000 of its 200,000 residents work in the financial district.
The Dutch financial daily writes today that all the residents will be affected: Geneva's financial sector pays a full 58% of all the taxes which support this magnificent and very luxurious Swiss city. see
Madoff, former Nasdaq market chairman, is suspected of carrying out the largest financial fraud in banking history. An estimated $50-billion which he had collected from investors, were purportedly never invested.
It's probably going to take years to untangle the complicated financial web he had woven and for people to get their money back: on Monday in a US court, Madoff agreed to a permanent freeze on his assets without admitting or denying fraud charges in a civil case against him, a US regulator said.
The US Securities and Exchange Commission said in a court filing Monday that the amount of fines and disgorgement will be decided later against Madoff, whose assets were temporarily frozen by court order two months ago. see
The entire world suffers from this so-named ponzi-scheme, as has been widely reported by Digital Journal - but super-luxurious Geneva, the financial centre of Switzerland, has been hit the very hardest. At least eight major firms had invested in the so called "Fund of Funds' scheme. see
One of Europe's biggest investors in hedge-funds, Union Bancaire Privee, says it may have to write off $700m of the Madoff investments. Notz, Stuckie & Cie estimate their losses at $ 737m. And Banque Benedict Hentsch stopped a planned fusion with Fairfield Greenwich Group when it discovered that the New York-based firm had sunk $ 7,5billion in Madoff investment, reports the Dutch Financial Daily.
Jerome Lussan of Laven Partners, an advisory firm for hedge funds, told the Dutch newspaper that 'people are in shock because Geneva was associated with conservative investments. The fact that so many banks are involved, is creating a great deal of uncertainty,' he said.
This growing malaise can be seen in the dramatic drop in the number of private jets landing at the Geneva international airport this past month. Other clues: the sale of Zai Spada aluminium/titanium skis, costing 5,900 swiss francs per set, have dropped by 25% - in the middle of the skiing season.
And at the lavish two-Michelin-star restaurant Domaine de Chateauvieux, strings of bankers are now cancelling reservations which were made six months in advance. see
More about Madoff, Geneva, Ponzi, Nasdeq, Securities exchange commission
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