- The Washington Times - Thursday, January 29, 2009

Wells Fargo & Co. wrote off $294 million because Bernard Madoff’s purported Ponzi scheme wiped out some of its customers and left them unable to repay loans, said Chief Financial Officer Howard Atkins.

“This is not our exposure to Madoff, this is our exposure to customers of ours who had investments in Madoff,” Mr. Atkins said Wednesday in an interview after the company announced fourth-quarter results, which included the pretax charge tied to Mr. Madoff.

“They’ve gone from being wealthy to not having any money,” Mr. Atkins said. He didn’t say how many were involved.

Mr. Madoff was arrested Dec. 11 and charged with securities fraud in federal court in Manhattan after purportedly telling his sons that his investment advisory business was a Ponzi scheme, in which early investors were paid with money from subsequent participants.

His clients included banks, hedge funds, charities, universities and wealthy individuals who have disclosed about $41 billion invested with Bernard L. Madoff Investment Securities LLC, according to a Bloomberg News tally of disclosures and press reports.

Financial stocks led a rally on Wall Street on Wednesday, buoyed by a Federal Reserve decision to keep the key federal funds rate at between zero and 0.25 percent. Significantly, the central bank said it would maintain that lending rate for “some time.”

Wells Fargo reported a fourth-quarter loss of $2.55 billion Wednesday after acquiring Wachovia Corp. and its default-plagued mortgage portfolio. The Madoff loss accounted for 5 cents of Wells Fargo’s 79-cent-a-share loss.

Wells Fargo shares rose $5, or 31 percent, to $21.19 on the New York Stock Exchange. The bank’s profit, excluding Wachovia’s results, topped analysts’ estimates.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide