Bank of Kuwait Clients Wait Not Too Long

It's rather amazing that it's a Middle Eastern financial firm that has chosen to make its clients whole after they were exposed through the bank to ponzi-master Bernard Madoff's criminal money vacuum. While other banks and firms have been a bit mum, denying and in denial, waiting for enough clarity that would enable them to avoid any culpability, a few others are seeking to get in front of the problem.

People close to NBK, one of the Arab world’s largest financial institutions, saw the measure as a way to strengthen its relationships with its clients. The NBK move puts pressure on other banks and fund managers whose clients lost money in Mr Madoff’s alleged fraud. “Other banks should similarly acknowledge responsibility for investing their clients’ monies in Madoff’s fraudulent enterprise, and with the threat of reputational losses and litigation, we would not be surprised to see other banks doing right by their clients,” said Mark Gross, of the US-based Pomerantz law firm, which represents European and US clients who lost money to Mr Madoff’s operation.

(F.T.-UK)

Banco Santander, the Spanish firm, also made limited moves in the direction of aiding those have suffered loss, though in a half hearted manner, offering its own stock to cover part of the losses.

In a time when too many are still playing financial games during great crisis, the National Bank of Kuwait offers a prime example of how certain companies should be behaving. While we believe, and as the article suggests, that it was an easy decision for them given the small amount of client losses, it nevertheless should be the proper example for those hoping to be the bank of choice when it comes to wealth management.

One needs to be able to stand behind, even guarantee, one's own expertise when one has guided others toward fraud.  That's why people give you the money in the first place.