Financial institutions in Geneva invested SFr5 billion ($4.25 billion) in the fraudulent scheme of Wall Street trader, Bernard Madoff.

Reports say hedge funds and other financial institutions in Geneva invested SFr5 billion ($4.25 billion) in the fraudulent scheme of Wall Street trader, Bernard Madoff.The report in the Saturday edition of Le Temps newspaper followed Friday's revelation by Swiss wealth management bank, Bénédict Hentsch, that it had entrusted Madoff's investment company with SFr56 million of its clients' assets.However, the regulatory body, the Federal Banking Commission, said on Saturday it did not have any details as to the extent of the impact of the Wall Street scandal on Switzerland.
Madoff, a former Nasdaq stock market chairman and founder of an investment securities company bearing his name, was arrested on a securities fraud charge on Thursday.He is suspected of running a phoney investment business that lost at least $50 billion and amounted to nothing more than a "Ponzi scheme" - a pyramid-type swindle in which very high returns are promised to early investors."
The Wall Street Journal reports that also the Zurich based bank Neue Privat Bank is hit by the Madoff scandal:"Nomura and Neue Privat Bank, meanwhile, together marketed access to Fairfield Sentry Ltd., a fund overseen by Mr. Madoff and sold through Fairfield Greenwich. The shares offered by Neue Privat and Nomura were leveraged three times -- meaning $3 of borrowed money was added to every $1 of capital invested in order to magnify returns, greatly increasing the potential losses for those investors."