Tuesday, 25 April 2017
Last updated 15 hours ago
Jan 14 2009 | 12:39am ET
A third lawsuit seeking class-action status has been filed against Fairfield Greenwich Group, the New York hedge fund that may have lost more than half of its assets in the Bernard Madoff scandal.
The complaint, filed in New York federal court, alleges that Fairfield Greenwich, its staff and a custodian failed to fulfill their fiduciary duties. It seeks the return of the assets invested in the Fairfield Sentry Fund, as well as fees and damages.
“Most, if not all, of the assets the plaintiff class had invested with defendants were stolen through the Madoff Ponzi scheme,” the plaintiffs, a pair of trusts, a Cayman Islands holding company and a Mexican investor, allege. “These losses could have been avoided if defendants had fulfilled their duties,” and “if they had adequately investigated and monitored Madoff.”
Fairfield Sentry had almost all of its $7.3 billion invested with Madoff, who was charged last year with running a $50 billion Ponzi scheme. The firm did not comment on the new suit.
Fairfield Greenwich has already been sued in both New York state and federal court since Madoff’s arrest last month. But this newest suit boasts some impressive legal firepower: Plaintiffs are represented by Boies, Schiller & Flexner, the New York-based law firm best known for representing the government in its antitrust case against Microsoft Inc. and former Vice President Al Gore in the landmark Bush v. Gore case that effectively awarded the White House to President George W. Bush eight years ago.
In addition to Fairfield Greenwich itself, the new complaint accuses founding partners Walter Noel, Andres Piedrahita and Jeffrey Tucker with breach of fiduciary duty, negligence and unjust enrichment. Also named as a defendant was Citco Bank Nederland’s Dublin branch, which managed Fairfield Greenwich’s escrow account.
“We have sued Fairfield Greenwich entities and their principals because they had failed to protect their investors—as they had represented they would do—in placing over $7 billion in Madoff’s hands,” Boies Schiller partner Stuart Singer said. “Neither Fairfield nor Citco Bank, the fund custodian, honored their fiduciary duty.”