Austria’s Bank Medici has reportedly been hit hard by the alleged Madoff Ponzi scheme, to the point that it is on the brink of collapse. Forbes reports that “former associates and banking sources say there is little hope for the five-year-old bank as investors have lost trust in the business.” Two of Medici’s funds, Herald USA and Herald Luxemburg, with total assets worth $2.1 billion, were reportedly exposed to the alleged Madoff fraud to an unknown extent.
Forbes reports that Bank Medici has already lost most of its customer base. According to its former CEO, Helmut Frey, 90.0% of the bank’s income was generated out of Madoff funds.
Advofin, an Austrian lawfirm representing 200 investors exposed to Madoff funds, stated today that it was considering a class action suit in the U.S. against the bank’s majority shareholder as well as Bank of Austria, which owns a 25.0% stake. A spokesman for Advofin said “the class action could be ready in a couple of weeks.”