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Originally published Sunday, December 14, 2008 at 8:35 AM

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Swiss bank sees $327M at risk in Madoff affair

The private Swiss bank Reichmuth & Co says it has 385 million Swiss francs ($327 million) at risk in the case of U.S. financier Bernard L. Madoff, who has been accused of securities fraud.

GENEVA —

The private Swiss bank Reichmuth & Co says it has 385 million Swiss francs ($327 million) at risk in the case of U.S. financier Bernard L. Madoff, who has been accused of securities fraud.

A letter to investors posted on the Lucerne bank's Web site Sunday says the exposure is through the Reichmuth Matterhorn, the bank's "fund of hedge funds," and that amount represents about 3.5 percent of the 11 billion francs ($9.4 billion) under the bank's management.

"We sincerely regret that Reichmuth Matterhorn is affected ... ," the letter said.

It is the second private Swiss bank to acknowledge having investments in funds managed by Madoff. The Geneva-based Banque Benedict Hentsch Fairfield Partners SA says its exposure is 56 million Swiss francs ($47.5 million) of client assets.

Swiss news media speculated Sunday that the total loss to banks in Switzerland could run into the billions of francs (dollars), but Swiss authorities said they were unable to say how much was at stake.

Madoff, a former chairman of Nasdaq stock market, was arrested Thursday in New York hours after the collapse of Bernard L. Madoff Investment Securities LLC. He has been accused by U.S. authorities of running a phony investment business that lost at least $50 billion.

Copyright © 2008 The Seattle Times Company

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