Swiss hedge fund reaches $235M settlement with Madoff trustee

Optimal Investment Services, the Geneva-based hedge fund arm of Banco Santander SA, has reached a settlement with Irving Picard, trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, for $235 million.

The settlement resolves all claims that the trustee had against Optimal, which agreed to pay 85% of the trustee’s original claims, the SIPC reported in a statement.

Banco Santander, of Madrid, Spain, was sued along with Optimal Investments in January.

It is the largest avoidance action to date in the Bernard L. Madoff Investment Securities proceeding, Kevin McCue, spokesman for the trustee, noted in an e-mail.

To date, the trustee has collected more than $1.2 billion for victims of the fraud.

Mr. Picard filed a motion today with the U.S. Bankruptcy Court in New York, which must approve the deal.

In March, Mr. Madoff pleaded guilty to orchestrating a $65 billion Ponzi scheme.