The Department of Labor on Tuesday announced a $217 million settlement with four companies to resolve a series of lawsuits relating to losses from investments in Bernard L. Madoff Securities' Ponzi scheme.
The settlement was reached with Ivy Asset Management, J.P. Jeanneret Associates, Beacon Associates Management, Andover Associates Management, and their former and current owners and executives, according to the DOL's statement.
The settlement is pending approval by the U.S. District Court in New York.
The settlement resolves litigation filed by both the DOL and the New York attorney general's office as well as private and class-action lawsuits brought by individuals and pension plans that claimed they invested in Madoff's trading strategy on the advice of Ivy Asset Management and the three other companies, according to the DOL's statement.
The suits, including the DOL's, alleged the four firms and their owners and principals “misrepresented and concealed doubts and suspicions” about investment in the Madoff trading strategy, the statement said.
Ivy Asset Management is a hedge fund-of-funds manager that invested in Madoff Securities through its funds and provided advice to J.P. Jeanneret Associates. Jeanneret was an investment consultant to about 70 pension plans, many of them small union plans based in upstate New York. Beacon and Andover ran hedge funds of funds that invested in Madoff's trading strategy and were used by many employee benefit plans, according to the DOL's statement.
“The settlement agreement … provides a measure of justice for Americans who worked hard for their retirement then saw hoped-for stability disappear,” said Labor Secretary Hilda L. Solis in the statement.
If the settlement is approved, Ms. Solis added, pension and health plans should recover “all or nearly all” of the money lost in the Madoff Ponzi scheme when combined with expected payments from the Madoff bankruptcy estate.
Ivy Asset Management and defendants Lawrence Simon and Howard Wohl agreed to pay $210 million. Jeanneret and its owners, John P. Jeanneret and Paul Perry, agreed to pay $3 million, and Beacon owner Joel Danzinger and Harris Markoff, owner of Andover, agreed to pay $3.5 million and drop a claim of $3.3 million for management fees.
None of the defendants or their attorneys could be immediately reached for comment.
On behalf of Beacon Associates and Andover Associates, Arthur G. Jakoby, a partner at the law firm of Herrick, Feinstein, said in a statement: “This settlement probably is the most favorable outcome for any investor who invested with Madoff through an investment feeder fund … this settlement provides our investors with justice and will restore … their hard-earned monies.”
“Ivy is pleased to have reached an agreement that allows it to put these matters behind it,” said Douglas W. Squasoni, chief restructuring officer and chief investment officer of Ivy Asset Management, which is a wholly owned subsidiary of Bank of New York Mellon (BK) Corp. (BK)
Patrice J. Kozlowski, a BNY Mellon spokeswoman, did not return repeated calls seeking comment.
Neither Mr. Jeanneret nor Mr. Perry returned a call seeking comment. Brian E. Whiteley, a partner at Hiscock & Barclay and Mr. Jeanneret's attorney, also did not return a call for more information.”