Unit of Bank of New York Mellon to Pay $210M Settlement for Madoff Investor Advice
A Bank of New York Mellon subsidiary that advised clients who invested with Bernard Madoff has agreed to pay $210 million to settle suits by the U.S. Department of Labor, the New York Attorney General’s office and private investors.
Ivy Asset Management is paying the money to resolve allegations that it hid suspicions about Madoff to earn millions of dollars in fees as an investment adviser, report the Wall Street Journal (sub. req.) and Bloomberg News. The firm earned $40 million in fees while advising on Madoff investments; its clients lost $236 million to Madoff, according to a press release by New York Attorney General Eric Schneiderman.
Other investment-adviser defendants in the litigation have agreed to pay $9 million. The settlement requires court approval.
The deal will allow Ivy clients who lost money to Madoff to recover nearly all of their original investment, after they also receive expected recoveries in bankruptcy court, according to Schneiderman. The U.S. Department of Labor, which based its suit on alleged ERISA violations, also issued a press release.
“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,” Secretary of Labor Hilda Solis said in the press release.