The New York attorney general has sued Ivy Asset Management, a subsidiary
of Bank of New York Mellon, for fraud related to the Bernard Madoff
Ponzi scheme. The lawsuit, filed May 11, alleges that the company’s two senior
officials, Lawrence Simon and Howard Wohl, committed breaches of
fiduciary duty when giving advice to investors regarding Madoff-managed funds.
The attorney general claims that Simon and Wohl were in possession of information
that led them to believe any investment in Madoff funds would be unwarranted,
but that rather than inform their clients about their misgivings they
misled their clients and hid the truth from them about the funds.
According to the suit, "Seventy-six upstate New York union pension
and welfare plans were victimized by the fraud, losing more than $150
million needed to fund pensioners’ retirement."
Douglas Squasoni, Ivy’s chief restructuring officer, claims that
the company never misled its customers about Madoff and warned clients
to reduce their exposure, according to the NY Daily News.