Bank of New York Mellon's Ivy Asset Management and two of its executives denied they misled clients about investments tied to convicted Ponzi scheme operator Bernard Madoff and asked a judge to dismiss the claims made by New York Attorney General Andrew Cuomo.
Ivy, BNY Mellon's New York-based investment adviser, withheld damaging information about Mr. Madoff so the firm could make millions of dollars in fees, Mr. Cuomo said when he sued Ivy in May. He also sued former Ivy CEO Lawrence Simon and ex-Chief Investment Officer Howard Wohl. The complaint was filed in New York state Supreme Court.
In their answers filed Monday, Messrs. Simon and Wohl as well as Ivy asked for a judgment in their favor, dismissal of all claims and payment of legal fees.
The three parties said they “had no duty to disclose the information that the complaint alleges was not disclosed,” the defendants wrote. They also claim they “acted at all times in good faith and without any fraudulent intent.”
From 1998 to 2008, Ivy was paid more than $40 million to give advice and conduct due diligence for clients with large Madoff investments, Mr. Cuomo claims. He said internal e-mails revealed that even after the company learned Mr. Madoff wasn't investing client funds as promised, Ivy kept silent to keep from losing the fees. Ivy's clients lost more than $227 million, Mr. Cuomo said.