Spain’s Banco Santander has failed to dismiss a U.S. lawsuit by investors in its $3.1 billion hedge fund arm to recover losses linked to Bernard Madoff’s Ponzi scheme, Reuters reports. The ruling will allow investors in a “feeder fund,” advised by the bank’s Optimal Investment Management Services unit, to pursue a federal securities law claim against Santander. As per the modified complaint filed on Nov. 15, the Optimal Strategic U.S. Equity Fund invested 100% of its assets with Madoff and his firm, Bernard L Madoff Investment Securities. The investors alleged that the defendants ignored Madoff’s fraud signals and misled them about how closely they were monitoring Madoff.

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