Bank of New York Mellon Corp. (BK:US)’s Ivy Asset Management agreed to a $210 million settlement with the state of New York to resolve allegations it misled clients that invested with Bernard Madoff.
Ivy, which reached the agreement with New York Attorney General Eric Schneiderman, was sued by the state in 2010, accused of concealing from investors negative information it learned about Madoff in order to keep collecting fees.
“Today’s settlement brings accountability for one of the worst financial frauds in American history, and justice to defrauded investors,” Schneiderman said in a statement.
Ivy was paid more than $40 million between 1998 and 2008 to give advice and conduct due diligence for clients with large Madoff investments, according to the attorney general’s office. Ivy’s clients lost more than $236 million after Madoff’s Ponzi scheme collapse, the office said.
Schneiderman earlier this year reached a $410 million agreement to settle a state lawsuit filed by Schneiderman’s predecessor, Andrew Cuomo, against Madoff feeder-fund manager J. Ezra Merkin. Madoff trustee Irving Picard then sued Schneiderman, contending that the attorney general is recovering on claims that belong to all Madoff customers and that only the Madoff trustee can pursue.
Douglas Squasoni, chief restructuring officer and chief investment officer of Ivy, said in an e-mailed statement that the firm is pleased about reaching a settlement “that allows it to put these matters behind it.”
Ivy was sued in 2010 by Cuomo. The settlement will be used to return money to investors, Schneiderman’s office said.
The case is the New York v. Ivy Asset Management, 450489-2010, New York state Supreme Court (Manhattan).
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