Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington
Heraldnet.com

The top local business stories in your email

Contact Us:

Josh O'Connor
Publisher
Phone: 425-339-3007
joconnor@heraldnet.com

Jody Knoblich
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049
jknoblich@heraldnet.com

Jim Davis
Editor
Phone: 425-339-3097
jdavis@heraldnet.com

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

Bank of New York Mellon unit settles Madoff case for $210 million

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
By Andrew Tangel
Los Angeles Times
Published:
NEW YORK -- A Bank of New York Mellon subsidiary will pay $210 million to settle claims it concealed red flags showing Bernard Madoff was running a massive Ponzi scheme.
Due diligence by Ivy Asset Management revealed discrepancies in Madoff's stated investment strategy, according to a statement by New York Attorney General Eric Schneiderman, who announced the settlement Tuesday.
While Ivy steered clients to invest in Madoff, thereby collecting fees for itself, some at the firm had reservations about Madoff, the attorney general said.
Schneiderman cited an email one Ivy principal sent to a subordinate: "Ah, Madoff, you omitted one possibility -- he's a fraud!"
Ivy didn't disclose its suspicions to clients, Schneiderman said, and falsely told them that "we have no reason to believe there is anything improper in the Madoff operation."
"Ivy Asset Management violated its fundamental responsibility as an investment advisor by putting its own pecuniary interests ahead of the interests of its clients," Schneiderman said. "An investment advisor should apprise its clients of risks, but Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees. As a result, its clients suffered massive and avoidable losses."
Madoff's multibillion-dollar Ponzi scheme was revealed in December 2008. He is serving a 150-year prison sentence.
Schneiderman sued Ivy in 2010. The settlement concludes suits also brought by the U.S. Department of Labor and private plaintiffs, and includes another $9 million from other defendants. The settlement will repay Madoff's investors and cover fees and expenses of those who brought the suits.
---
©2012 Los Angeles Times
Visit the Los Angeles Times at www.latimes.com
Distributed by MCT Information Services

MORE HBJ HEADLINES

CALENDAR

Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus