$220 Million Madoff Settlement Announced by DOL

The Labor Department had sued four firms and their owners and officers Oct. 21, 2010, asserting they had violated the Employee Retirement Income Security Act and breached their fiduciary duties to benefit plans by recommending, making, and maintaining investments with Bernie Madoff.

U.S. Labor Secretary Hilda Solis announced a settlement will pay nearly $220 million to compensate employee benefit plans and other investors that suffered losses through investments in Bernie Madoff's Ponzi scheme. The settlement is pending approval by a federal judge and would resolve DOL litigation, actions brought by New York's attorney general, and several private lawsuits and class actions filed plans and other investors that invested with Madoff.

According to DOL, the settlement was reached with Ivy Asset Management LLC, J.P. Jeanneret Associates Inc., Beacon Associates Management Corp., Andover Associates Management Corp., and their current and former owners and officers. "The settlement agreement we're announcing today provides a measure of justice for those Americans who worked hard to prepare for their retirement and then saw hoped-for stability disappear," Solis said Nov. 13. "My department is committed to ensuring that workers and retirees receive the benefits they've earned and deserve. If approved by the court, this settlement, combined with expected payments from the Madoff bankruptcy estate, will allow worker benefit plans impacted by Bernard Madoff's illegal and reprehensible scheme to recover all, or nearly all, of the money they invested with him."

"Today's settlement brings accountability for one of the greatest financial frauds in American history and justice to defrauded investors. We have recovered over $210 million for the victims who were harmed as a result of the world's most notorious Ponzi scheme," said New York Attorney General Eric Schneiderman. "Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients. 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."

The Labor Department sued Ivy, Jeanneret, Beacon, Andover, and their owners and officers Oct. 21, 2010, asserting they had violated the Employee Retirement Income Security Act and breached their fiduciary duties to benefit plans by recommending, making, and maintaining investments with Madoff. "Nothing can make up for the years-long agony that plan administrators and participants and individual investors were put through by these defendants and Madoff," said Phyllis Borzi, assistant secretary of Labor for Employee Benefits Security, "but this settlement should go a long way toward making victims financially whole and, hopefully, closing a painful chapter for many workers and families."

According to the DOL announcement, Ivy served as the investment adviser for Jeanneret, Beacon, and Andover and introduced those parties to Madoff, and Jeanneret served as the investment manager for more than 70 plans that invested with Madoff through several methods, including its own fund of funds, starting in 1991. Beacon and Andover were the investment managers for the Beacon and Andover funds, which invested heavily with Madoff starting in the early 1990s.

The settlement agreement calls for Ivy and its principals to pay a total of $210 million. Jeanneret and its owners, John P. Jeanneret and Paul Perry, have agreed to pay $3 million. Beacon and Andover and their owners, Joel Danziger and Harris Markhoff, have agreed to pay $3.5 million and relinquish a claim of more than $3.3 million for management fees.

Product Showcase

  • Magid® D-ROC® GPD412 21G Ultra-Thin Polyurethane Palm Coated Work Gloves

    Magid’s 21G line is more than just a 21-gauge glove, it’s a revolutionary knitting technology paired with an advanced selection of innovative fibers to create the ultimate in lightweight cut protection. The latest offering in our 21G line provides ANSI A4 cut resistance with unparalleled dexterity and extreme comfort that no other 21-gauge glove on the market can offer! Read More

  • Safety Knives

    The Safety Knife Company has developed a quality range of safety knives for all industries. Designed so that fingers cannot get to the blades, these knives will safely cut through cardboard, tape, strapping, shrink or plastic wrap or a variety of other packing materials. Because these knives have no exposed blades and only cut cardboard deep, they will not only protect employees against lacerations but they will also save product. The Metal Detectable versions have revolutionary metal detectable polypropylene knife bodies specifically for the food and pharmaceutical industries. This material can be detected and rejected by typical detection machines and is X-ray visible. Read More

  • HAZ LO HEADLAMPS

    With alkaline or rechargeable options, these safety rated, Class 1, Div. 1 Headlamps provide long runtime with both spot and flood options in the same light. Work safely and avoid trip hazards with flexible hands-free lighting from Streamlight. Read More

Featured

Artificial Intelligence

Webinars