DOL settles with Austin Capital over Madoff losses for pension plans
By Hazel Bradford | February 27, 2013 3:18 pm
Pension and benefit funds investing indirectly in Bernard Madoff's Ponzi scheme through funds managed by Austin Capital Management will get more than $34 million in a settlement announced Wednesday by the Department of Labor.
The settlement with Austin Capital Management Ltd. and Austin Capital Management GP Corp. follows a settlement in December with Austin's parent company, KeyCorp, which agreed to pay $9.1 million into the employee benefit plans. The names of the plans were not available at press time, and calls to Austin Capital Management were not returned. Austin Capital will also pay a civil penalty of $4.3 million to the federal Treasury.
DOL officials asserted that Austin Capital violated the Employee Retirement Income Security Act by having certain funds invest the plans' assets with Mr. Madoff's BMP Fund.
The funds involved were the Austin Capital Safe Harbor ERISA Dedicated Fund, Safe Harbor Portable Alpha Offshore Fund One, Safe Harbor Portable Alpha Offshore Fund Two, Safe Harbor Offshore Fund, All Seasons Qualified Purchaser Fund, All Seasons Offshore Fund and the Balanced Offshore Fund.