Sunday, 3 May 2015
Last updated 1 day ago
May 11 2010 | 12:52pm ET
New York Attorney General Andrew Cuomo has sued fund of hedge funds shop Ivy Asset Management, alleging that the firm failed to warn clients about its concerns over Bernard Madoff’s operations.
Ivy clients—among them some 76 upstate New York pension funds—lost more than $227 million when Madoff’s $65 billion Ponzi scheme collapsed in December 2008. But it didn’t have to be so: According to the lawsuit, Ivy uncovered several “disturbing facts” about Madoff but “hid the truth” from most clients, especially those who invested in its Madoff feeder funds.
Ivy “saw the trouble with Madoff coming around the bend, but instead of guiding their clients through the financial waters, they sold them down the river,” Cuomo said.
Cuomo accused Ivy of offering “stronger warnings” about Madoff to clients investing in its other funds. The attorney general cited internal e-mails which allegedly reveal that Ivy feared losing the fees it earned on the feeder funds.
The lawsuit accuses Ivy of collecting some $40 million in “fraudulently obtained fees.” It also accuses founder and former CEO Lawrence Simon and former chief investment officer Howard Wohl, who are both named in the suit, of using their relationship with Madoff to build the Ivy brand before selling it to the Bank of New York 10 years ago. According to Cuomo, each made more than $100 million on that sale.
BNY Mellon Asset Management in March began to dismantle Ivy, laying off most of its employees.
According to the lawsuit, Ivy “left their clients in the dark” after finding itself less than “satisfied as a fiduciary to invest client assets.”
Simon has denied any wrongdoing.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…