The New York State Attorney General’s office on Tuesday announced a $210 million settlement with Ivy Asset Management, an investment firm that steered money to Bernard Madoff.
“Today’s settlement brings accountability for one of the worst financial frauds in American history, and justice to defrauded investors,” said Attorney General Eric T. Schneiderman in a statement.
Schneiderman said Ivy Asset Management, a unit of Bank of New York Mellon (NYSE:BK), violated its duties as an investment advisor by putting its own financial interests ahead of its clients.
“An investment adviser should apprise its clients of risks, but 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," he said.
The firm was paid $40 million in fees between 1998 and 2008 for steering clients to Madoff, according to the statement.
In conducting due diligence into Madoff’s investment strategies Ivy Asset Management allegedly discovered that Madoff wasn’t doing everything he claimed.
Madoff was arrested in December 2008 and sentenced to 150 years in prison six months later for masterminding arguably the largest financial fraud in history.