ALBANY, N.Y. (AP) — Officials have reached a $210 million settlement with Ivy Asset Management, a BNY Mellon subsidiary that advised clients to invest with Wall Street multibillion-dollar swindler Bernard Madoff.
The settlement of lawsuits filed by the New York attorney general, U.S. Labor Department and private plaintiffs also provides for about $9 million in payments by other defendants. Combined with anticipated future payments from Madoff bankruptcy proceedings, New York Attorney General Eric Schneiderman said it is expected to return nearly all of the original investments to those who were defrauded, including union pension funds from upstate New York.
"Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients," Schneiderman said. "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."
Labor Secretary Hilda Solis said the agreement "provides a measure of justice for those Americans who worked hard to prepare for their retirement and then saw hoped-for stability disappear."
BNY Mellon referred questions to Ivy Asset Management, which has been winding down operations.
"Ivy is pleased to have reached an agreement that allows it to put these matters behind it," said Douglas Squasoni, chief restructuring officer.
Between 1998 and 2008, authorities say Ivy was paid more than $40 million to give advice and conduct due diligence for clients with large Madoff investments.