NEW YORK, Dec. 15 (UPI) -- Banks from Japan to France say their exposure to fraud conducted by a New York trading company could reach billions of dollars.
Trader Bernard Madoff was arrested last week after allegedly saying his trading firm was "basically, a giant Ponzi scheme." Authorities say the company could be responsible for $50 billion in fraud.
The Royal Bank of Scotland said its exposure to the scheme could add up to $600 million, CNN reported Monday.
Japan's Nomura said Monday it may be out $303 million and BNP Paribas in Paris said it may have lost $468 million.
Spanish banks also stand to record losses. Banco Santander said its exposure came to $23 million, while BBVA, the country's second largest bank, said it could lose $404 million.
British bank HSBC may have lost $1 billion, the Financial Times reported.
A Ponzi scheme operates by paying investors with money collected by other investors, rather than with legitimate returns on investments.
Securities and Exchange Commission inspectors are going through the books at Bernard L. Madoff Investment Securities, which has been in business since 1960.