Korean financial firms may face losses from Wall Street swindle

SEOUL, Dec. 13 (Yonhap) -- More than ten South Korean financial firms may suffer
investment losses from an alleged US$50 billion fraud led by a big-time U.S.
financier, industry sources said Saturday.

On Thursday, the U.S. Federal Bureau of Investigation arrested Bernard Madoff,
former chairman of the Nasdaq Stock Market, on charges of securities fraud in
what is called a Ponzi scheme, a pyramid-type swindle that promises early
investors with high returns with money from newcomers.
According to sources, more than ten local financial institutions including Korea
Life Insurance Co. may face at least $100 million in losses after investing in
hedge fund Fairfield Sentry Ltd. which entrusted Madoff's investment securities
firm with billions of dollars.
"We are checking which company has invested in this hedge fund," said an official
at the Financial Supervisory Service, the country's financial watchdog.
sooyeon@yna.co.kr
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