Another victim of the massive securities fraud by Bernard Madoff has been the termination of the agreement between Swiss based Banque Benedict Hentsch and the Fairfield Greenwich Group. The agreement to merge the bank and the hedge fund manager was signed in September of this year but, in a recent press announcement, the bank confirmed that the founding partners have acted to protect the interests of the bank and its clients by withdrawing from the agreement with immediate effect.

The bank thus reverts to its former name Banque Benedict Hentsch & Cie and regains its independence - and its former shareholders.

The bank has reported that its exposure to products managed by Mr Madoff represent an amount of some SFr56 million - less than 5 per cent of the assets under management at the bank.

Fairfield Greenwich has been reported to be one of the bigger investors in the Madoff stable with suggestions that it had AuM of some $7.5 billion - or a little over 50 per cent of the total money run by the group - invested in products run by the now notorious manager.

Executives at Banque Benedict Hentsch spent a sleepless weekend structuring the retreat, the final seal of which must be given by the Swiss Federal Banking Commission. Sources at the bank suggest that this approval was given yesterday morning, but a bank spokesman was unable to comment on this.