The numbers are larger than at Bramdean – the lie is the same:
Intensive due diligence is vital to ensuring the integrity and sustainability of the investment process . . . Each investment undergoes lengthy and detailed scrutiny according to clearly defined manager selection criteria.
The website on which this lie was printed has been pulled.
As the FT points out it was impossible to do due diligence on your Madoff investments because Bernie did not allow it. But Santander claimed they did it as did certain other fund-of-fund businesses.
There is however much bigger consequences to Santander being caught in a lie. Santander – as do almost all English speaking banks – needs to raise money in wholesale markets.
Raising money depends on trust and as Jim Grant has just pointed out (and as this blog has pointed out several times) there is currently a “bear market in trust”.
If the trust in Santander fails then Santander fails. And that would be a very big piece of Bernie Madoff collateral damage.