Banco Santander is allegedly set to face an investigation by Spanish prosecutors into how the family-controlled bank lost more than €2.3 billion of its clients' money with Bernard Madoff, the disgraced American fund manager.
The Wall Street Journal is reporting that the authorities want to know "the details of Santander's relationship with Madoff's firm and when Santander knew about problems related to it."
The majority of the losses are understood to be in Latin America with the paper reporting that up to 3,000 clients in the region have been hit. Santander is Europe's second-largest bank but its losses are the biggest by a single bank.
In addition, it is understood that funds run by the son and son-in-law of family patriarch and Santander chairman Emilio Botín also lost money, having been caught up in Madoff's complex Ponzi scheme which relied on multiple feeder funds.
The news represents a terrible start to the year for Botín and demonstrates how quickly fortunes can change. In 2008 he was widely lauded for the way he managed the bank through the credit crisis after he said the bank's success was down, in part, to its aversion to the risky transactions that scuppered many of its competitors.
The year culminated in him being voted Family Business Leader of the Year by Campden FB readers.