Fund Of Funds To ‘Vigorously’ Defend Madoff Lawsuit

Jun 30 2009 | 2:11am ET

Austin Capital Management, a fund of hedge funds shop that had some 7.5% of its assets invested with Ponzi scheme mastermind Bernard Madoff, is going on the defensive against a hedge fund filed on behalf of two New Mexico state funds.

The firm, which is based in the Texas capital, said last week that it would “vigorously” defend itself against the lawsuit, filed by the National Education Association of New Mexico, a teachers union, over $25 million in losses suffered by state’s Educational Retirement Board and State Investment Council. The union lawsuit alleges that Austin ignored several red flags because of its longstanding relationship with Madoff, who was sentenced to 150 years in prison for running a $65 billion Ponzi scheme yesterday.

“Austin Capital is aware that it and certain of its employees and affiliates were named as defendants in a litigation filed and recently unsealed in New Mexico,” Sally Martin, a spokeswoman for the firm, told the Austin American-Statesman. “We believe the allegations made are unfounded, and we intend to vigorously defend Austin and its employees and affiliates.”

Austin Capital’s parent, Ohio-based KeyCorp, last month announced it was shutting down the fund of funds shop.

RELATED ARTICLES:

SPECIAL COVERAGE: The Bernard Madoff Scandal


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of