NEW YORK (CBSNewYork) – The New York State Attorney General’s office has announced a $210 million settlement deal with Ivy Asset Management.
The New York Mellon bank subsidiary had advised its clients to invest with Bernard Madoff.
WCBS 880’s Irene Cornell reports
“Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients. An investment adviser 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,” Attorney General Eric Schneiderman said in a news release.
According to AG Eric Schneiderman’s office, the money from the settlement will mostly repay Ivy Asset Management clients who lost money to Madoff’s fraud.
The Attorney General’s office investigation revealed that Ivy had deep suspicions about Madoff’s operation but never informed its clients.
When Madoff was pressed by Ivy management to describe his trading strategy, he offered up three different explanations, all of which Ivy officials knew to be false, according to the AG’s office.
One email from an Ivy boss to a subordinate commenting on a report on Madoff said, “Ah, Madoff, you omitted one possibility – he’s a fraud!,” according to a report from Schneiderman’s office.
According to Schneiderman, the victims were hundreds of individual investors, dozens of New York union and pension and welfare plans.
Madoff’s massive Ponzi scheme bilked investors out of a total of $65 billion. Madoff was sentenced n 2009 to 150 years in prison for running the largest Ponzi scheme in history.