“A Bank of New York Mellon Corp. BK -0.02% unit will pay $210 million to resolve a series of lawsuits by clients who claimed they suffered losses in Bernard Madoff’s massive fraud, New York Attorney General Eric Schneiderman said on Tuesday.
The settlement with Ivy Asset Management LLC resolves litigation by the attorney general’s office, the U.S. Department of Labor and investors. An additional $9 million will be contributed by other individual defendants in the cases.
Combined with future amounts investors anticipate receiving in the Madoff bankruptcy proceeding, the settlement is expected to return all or nearly all the original investment to those Ivy investors defrauded by Mr. Madoff’s Ponzi scheme.
“Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients,” Mr. Schneiderman said.
“An investment adviser should apprise its clients of risks, but Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees. As a result, its clients suffered massive and avoidable losses.”
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