At least 10 of Panama's 34 brokerages stung by Madoff

Not long after the game was up for Bernard L. Madoff's estimated $50 billion investment pyramid scheme, the names of two Spanish banks that operate in Panama --- Banco Santander and BBVA --- were mentioned in international press reports as major losers in the affair. Panama's Banking Superintendency announced that three banks in Panama had suffered losses due to Madoff but none of them was facing a liquidity crisis. It declined to name which banks, and local reports have named several other than Banco Santander and BBVA. Due to our banking and corporate secrecy laws it's hard for any journalist without an inside source willing to break the law to definitively identify a bank that got stung.

More than one month into the unfolding financial scandal, Panama's Comision Nacional de Valores (National Securities Commission or CNV) told La Prensa that it had detected 10 local brokerage houses that either had their own or other people's money invested in the Madoff pyramid or had sold their clients investments in the fund. The estimated amount of money involved was $27.5 million. Now investors are told that there is a silver lining in the cloud, that the CNV will look into the practices and solvency of securities brokerages that operate here.

There are 34 licensed brokerages in Panama, of which seven are banks directly licensed to deal in securities and another 16 are subsidiaries of banks. All of this country's biggest banks are either directly or indirectly in the stock brokerage business.

Like the Banking Superintendent's office, the CNV declines to identify those brokerage houses that were burned by the Madoff scam.

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