By Karen Freifeld
NEW YORK, Nov 13 (Reuters) - Ivy Asset Management agreed to
pay $210 million to settle lawsuits for advising clients to
invest with Ponzi schemer Bernard Madoff, the New York attorney
general said on Tuesday.
The New York-based investment adviser, a subsidiary of Bank
of New York Mellon Corp, withheld damaging information about
Madoff to make millions of dollars in fees, New York Attorney
General Eric Schneiderman said in a statement.
Between 1998 and 2008, the firm was paid more than $40
million to conduct due diligence and advise clients regarding
Madoff investments, Schneiderman said.
Clients lost more than $236 million when Madoff's Ponzi
scheme collapsed, the statement said.
"Ivy deliberately concealed negative facts it uncovered,"
Schneiderman said in the statement. "As a result, its clients
suffered massive and avoidable losses."
The New York attorney general's office sued Ivy in 2010 for
fraud and breach of fiduciary duty. The settlement resolves
litigation by the office, the U.S. Department of Labor and
investors, Schneiderman said.
"Ivy is pleased to have reached an agreement that allows it
to put these matters behind it," Douglas W. Squasoni, chief
restructuring officer and chief investment officer, said in a
statement. The firm is winding down.
In addition to the $210 million paid by Ivy, other
defendants will pay $9 million, Schneiderman said.
Madoff pleaded guilty in March 2009 to perpetrating the
largest Ponzi scheme in U.S. history and is serving a 150-year
prison sentence.
Kevin Heine, a spokesman for Bank of New York Mellon, had no
immediate comment.
BNY Mellon, the world's largest custody bank, has more legal
battles ahead. The bank is fighting lawsuits from the New York
attorney general and other U.S. authorities that accuse it of
overcharging customers for foreign currency transactions.
The case is People of the State of New York v. Ivy Asset
Management, 450489/2010, New York state Supreme Court, New York
County.
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