Westport National Bank today sought to assure customers and employees that it acted only as a custodian for customers investing in Bernard Madoff Investment Securities.
Westport National Bank sent a letter to customers and employees saying it acted only as a custodian for customers investing with Bernard Madoff. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com/file
The bank sent a letter to clients and employees after two law firms in Florida said investors had retained them to investigate claims that the bank had sent customer funds to Madoff, a securities dealer under investigation for an alleged $50 billion Ponzi scheme. (See WestportNow Dec. 31, 2008)
“First, be assured that the Bank has not invested any of its own funds or the funds of its depositors with Madoff, and the Bank has not advised any customer or anybody else to invest with Madoff,” said Richard T. Cummings Jr., president of the bank at 1495 Post Road East, a division of Connecticut Community Bank, N.A.
In 1999, at the request of an unidentified local company, Westport National Bank replaced another financial institution as the custodian for a number of individuals and entities that were investing with Bernard L. Madoff Securities, Cummings said.
“Nearly all of these individuals and entities had been investing with Madoff long before the Bank was founded in 1998,” Cummings said.
The custodial agreement “reflected the fact that each custodial client directed the Bank to give Madoff ‘full discretionary authority’ to invest the custodial client’s funds,” he said.
“Each custodial client specifically acknowledged in writing that the client had not relied on the Bank in choosing to invest with Madoff,” he said.
Cummings opened his letter by saying: “You may have seen recent press articles regarding the Bank and Bernard L. Madoff Investment Securities. The press is incomplete and inaccurate.”
