* Offer to discretionary clients could reach 120 mln Sfr
* Company’s Madoff losses a reported $750 mln
* Offer comes ahead of key legal decision on Aurelia
By Martin de Sa’Pinto
ZURICH, April 23 (Reuters) - Geneva-based wealth manager Notz Stucki said on Thursday it will partially reimburse clients who lost a reported $750 million in Bernard Madoff’s $65 billion fraud, following in the steps of larger rivals in Switzerland.
Notz Stucki said it would compensate clients with a discretionary management mandate — meaning that managers at Notz Stucki decided how to invest their assets — with up to 120 million Swiss francs ($103.2 million).
The offer comes just a day before directors at Aurelia, another Geneva-based wealth manager which was heavily invested in Madoff, hear whether criminal charges against them over the losses will be allowed to proceed.
Clients who specifically asked for access to Madoff will not be compensated however, a spokesman for Notz Stucki said.
The spokesman said the wealth manager had taken its lead from Union Bancaire Privee and from Santander (SAN.MC) unit Optimal, two Geneva-based companies that have made similar offers to clients nursing Madoff losses.
Other wealth managers may be spurred to pay back Madoff-hit investors to avert litigation, lawyers have told Reuters.
Notz Stucki’s spokesman said the wealth manager’s decision to compensate clients was not aimed at fending off legal action. “This isn’t the type of decision you can take in a few days, it wasn’t influenced by the (coming) Aurelia decision,” he said.
Lawyers of wealthy clients who had invested in Aurelia have told Reuters that Aurelia lost up to $800 million to Madoff.
The spokesman said the compensation payments would be achieved via the issue of a note payable over five years which would be held by a separate legal entity.
In a press release, Notz Stucki said it had been hit by the fraud through its Plaza fund, a vehicle whose management had been delegated to Bernard Madoff.
It said the fraud occurred despite regular monitoring and PriceWaterhouseCoopers’ annual audit of the fund.
It said the Plaza fund charged a 1 percent annual management fee, which is low in comparison to the majority of Madoff feeders, and that it never received performance fees, or commissions or finder fees from Madoff, as many other funds did. ($1=1.163 Swiss Franc) (Reporting by Martin de Sa’Pinto, editing by Will Waterman and Andy Bruce)