Fairfield Greenwich’s Madoff Investment Triggers Suit (Update1)
By Cynthia Cotts
Dec. 22 (Bloomberg) -- Walter Noel’s Fairfield Greenwich Group, the hedge-fund firm that had $7.5 billion invested with Bernard Madoff, was sued by investors for allegedly failing to protect their assets.
Noel’s Greenwich Sentry fund invested $220 million with Madoff and his Fairfield Sentry fund invested $7.3 billion solely in Madoff, jeopardizing investors’ interests while collecting “millions of dollars in fees,” according to a complaint filed Dec. 19 in New York State Supreme Court in Manhattan.
Fairfield Greenwich Group founding partners Noel, Andres Piedrahita and Jeffrey Tucker are accused of breach of fiduciary duty, negligence and unjust enrichment, as are Brian Francouer and Amit Vijayvergiya of FG Bermuda, a Noel affiliate. The complaint was filed as a class action, or group, lawsuit on behalf of investors.
“FG defendants failed to perform even a minimum level of due diligence regarding the activities of Madoff,” according to the complaint.
Madoff, 70, was arrested Dec. 11 and charged with running an alleged $50 billion Ponzi scheme based on his own admission. He remains under house arrest in his New York apartment.
Noel, Tucker and Piedrahita didn’t immediately return calls seeking comment. comment AND that Fairfield Greenwich spokesman Thomas Mulligan didn’t have an immediate comment.
Noel’s 20-year business relationship with Madoff helped earn the group “millions of dollars in fees,” according to the complaint.
Fairfield Greenwich Group said it’s assessing its Madoff- related losses and is willing to cooperate with government investigations into the alleged fraud, according to a statement posted Dec. 16 on the fund’s Web site.
“We are seeking to gather all facts, work diligently with counsel to determine the appropriate course of action toward recovery, and stand ready to assist the authorities with their investigation,” the statement said.
Lead plaintiffs Pasha and Julia Anwar, who invested in Fairfield Greenwich funds, claim Noel’s team ignored the “red- flag warning” that Madoff’s investments produced small, steady gains in a declining market.
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