Madoff victims file suite in Miami

MIAMI, Jan. 28 (UPI) -- Bernard Madoff fraud victims who invested through Spanish bank Banco Santander filed suit in Miami, claiming the bank neglected proper fiduciary oversight.

The bank has admitted it lost $3 billion through investments in Bernard L. Madoff Securities. Madoff is under investigation for running a Ponzi scheme that some estimates say defrauded investors of more than $50 billion.

Attorneys are seeking class-action status for the suit, which was filed on behalf of Marcelo Guillermo Testa of Buenos Aires and Mar Octava Ltd., a Chilean company that lost $300,000, The Miami Herald reported Wednesday.

The plaintiffs invested through Optimal Investment Services, a firm managed by Banco Santander.

The bank attempted to head off the lawsuits Tuesday with a settlement offer of Optimal Investment Services preferred stock equal to customers' original investment and redeemable in 10 years, the Herald said.

"The total value of the proposed offer is about $1.82 billion," a bank spokesman said.

"We're doing this to preserve our franchise in the private banking segment," he said.