The manager of a Madoff feeder fund has been charged with civil fraud by the New York Attorney General's office for steering 2.4 billion dollars to Madoff.
We have not seen the complaint, but Reuters is reporting that he is accused of ignoring red flags regarding Madoff's investments because of the fees he was receiving. The manager claims he has been fully cooperative, performed extensive due diligence and was misled by Madoff just like everyone else.
http://news.yahoo.com/s/nm/20090406/bs_nm/us_merkin
As we noted here, this fraud is too large for the securities regulators and prosecutors to ignore the potential liability of the fund managers who placed investments with Madoff. It remains to be seen how much liability, if any, these managers have for Madoff's fraud, and no one is alleging that the manager knew of the fraud, only that they should have known of the fraud.
We expect that other managers will be the subject of similar civil suits. Massachusetts has already filed against Fairfield Greenwich.
We can expect to see cases against other managers, and suits by individual investors who invested through these funds.
We have not seen the complaint, but Reuters is reporting that he is accused of ignoring red flags regarding Madoff's investments because of the fees he was receiving. The manager claims he has been fully cooperative, performed extensive due diligence and was misled by Madoff just like everyone else.
http://news.yahoo.com/s/nm/20090406/bs_nm/us_merkin
As we noted here, this fraud is too large for the securities regulators and prosecutors to ignore the potential liability of the fund managers who placed investments with Madoff. It remains to be seen how much liability, if any, these managers have for Madoff's fraud, and no one is alleging that the manager knew of the fraud, only that they should have known of the fraud.
We expect that other managers will be the subject of similar civil suits. Massachusetts has already filed against Fairfield Greenwich.
We can expect to see cases against other managers, and suits by individual investors who invested through these funds.
