Mass. Moves Forward With Fairfield Greenwich Suit, Despite Offer

Aug 17 2009 | 3:01am ET

A Massachusetts official will not agree to settle his case against Fairfield Greenwich Group, despite the Bernard Madoff feeder fund’s offer to make his state’s investors whole.

Fairfield Greenwich says it has offered to meet the demands of William Galvin, secretary of the Commonwealth of Massachusetts and noted hedge fund bête noir, without any caveats. Reuters reports that the firm is willing to repay all losses suffered by Massachusetts investors.

Fairfield Greenwich is the New York-based fund of hedge funds group that lost more than half of its assets in Madoff’s $65 billion Ponzi scheme. But only a handful of its investors—to date, just about a dozen have been found, with total losses of $6 million—lived in Massachusetts, according to the firm.

“When the secretary brought this action in April, his stated goal was full restitution for Massachusetts investors,” FFG spokesman Thomas Mulligan said. “That is what Fairfield Greenwich has now offered. So we are baffled by his refusal.”

According to Reuters, Galvin is skeptical about FFG’s ability to make good on its promises to pay. The firm lost more than $7 billion in the Madoff scandal, most of it from a single fund that invested exclusively with the arch-fraudster, who is now serving 150 years in prison. Earlier this year, the firm, which has been inundated with lawsuits, gave up control of most of its remaining hedge funds.

Meanwhile, Galvin is desperately seeking to find more Madoff investors with Massachusetts ties. The secretary, who activist hedge fund manager Philip Goldstein once called a “bully” and “pompous ass,” is sending notices to newspapers and investment advisers as he tries to find all Massachusetts residents who lost money with Madoff.

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