$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

  • AirChek Connect Sampling Pump

    Stay connected to your sampling with the SKC AirChek® Connect Sampling Pump! With its Bluetooth connection to PC and mobile devices, you can monitor AirChek Connect pump operation without disrupting workflow. SKC designed AirChek Connect specifically for all OEHS professionals to ensure accurate, reliable flows from 5 to 5000 ml/min and extreme ease of use. AirChek Connect offers easy touch screen operation and flexibility. It is quality built to serve you and the workers you protect. Ask about special pricing and a demo at AIHA Connect Booth 1003. Read More

  • Preventative Heat Safety

    Dehydration and heat exposure impair physical and cognitive performance. Proper hydration boosts heat stress resilience, but hydration needs are highly individualized and hard to predict across a workforce. Connected Hydration® empowers industrial athletes to stay safe through behavioral interventions, informed by sports science, and equips safety teams with critical insights to anticipate high-risk situations and adapt to evolving environmental factors. Curious about applying the latest in sports science based hydration strategies for industrial athletes? Stop by booth #1112 at AIHA or schedule a free demo today at https://epcr.cc/demo. 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