Madoff-Burned Fund Of Funds Austin Sued Again

Apr 10 2009 | 8:13am ET

Texas fund of hedge funds shop Austin Capital Management has been hit with a second class-action lawsuit over losses suffered in the Bernard Madoff Ponzi scheme.

A San Diego law firm filed the suit in New York federal court, accusing Austin and its outside auditors of breach of fiduciary duty for not telling investors that it had allocated some 7.5% of its funds to Rye Investment Management, a Madoff feeder fund. The suit, which is seeking a lead plaintiff, covers institutional investors for the period between 2005 and Madoff’s arrest last year.

In February, a Philadelphia pension fund filed a class-action suit against Austin in Philadelphia. Earlier that month, the Massachusetts Pension Reserves Investment Management Board fired the firm just four months into its contract due to the Madoff debacle.

Coughlin Stoia Geller Rudman & Robbins’ suit includes a sub-class for employee benefit plans, claiming breach of fiduciary duty under the Employee Retirement Income Security Act of 1974.

The lawsuit seeks to recover damages on behalf of all investors during the three-year period.

RELATED:     Special Coverage: The Bernard Madoff Scandal


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of