Madoff exposure spreads

Man Group and HSBC among the financials reporting holdings with Madoff Securities, which is involved in an alleged fraud scandal in the US

Morningstar.co.uk Editors 15 December, 2008 | 1:58PM

UK financials and hedge fund group Man Group has said it has approximately $360m invested in two funds that are directly or indirectly sub-advised by Madoff Securities. Last week Bernard Madoff was arrested in New York on charges of an alleged fraud estimated to be worth some $50bn.

According to Man Group, although Madoff Securities is an SEC registered broker dealer and subject to the rules of five self regulatory organisations, including Nasdaq and NY Stock Exchange, based on information available to date, it appears a systematic and comprehensive fraud may have been committed, evading a range of structural controls.

Man's exposure to the troubled group is through RMF, its predominantly institutional fund of funds business, and represents 1.5% of its assets under management. The exposure is reportedly just 0.5% of funds under management for Man Group as a whole. Shares in Man in the FTSE 100 have held up well despite the bad news. Share price of the group moved up 2.50% to 251.25p as of 1:30pm today.

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Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.

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