Irving Picard, trustee for Bernard Madoff's business and representatives of investors, sued the Connecticutbased company, Fairfield Greenwich Group (“FGG”) for $3.5 billion. FGG was the largest feeder fund and the allegations are that it therefore should have been aware Madoff was engaged in fraud. The monetary calculation of $3.5 billion represents money that FGG received from Madoff on behalf of clients.This suit is one of many brought or to be brought by the trustee in charge of liquidating the assets of Bernard L. Madoff Investment Securities LLC (“BLMIS”). The allegations against FGG include failure to conduct due diligence when it invested in three of the their hedge funds; failure to audit BLMIS; failure to match any trade confirmation provided by BLMIS with actual trades executed; and fraudulently collecting fees amounting to $100 million per year from BLMIS investments.
The firm’s founder, Walter Noel, has a defense: My family and I are also victims of Madoff.
By Joanna M. Roberto