Opinion » General Opinion

Today’s Bright Bulb: Cuomo sues hedge fund in Madoff Ponzi scheme

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WHAT: New York State Attorney General Andrew Cuomo is suing Ivy Asset Management hedge fund and its two former principals for not warning all its clients that by 1997 they had evidence that now-imprisoned Bernard Madoff wasn’t making the stock trades he claimed to be profitably investing in.

WHY: Cuomo’s civil suit claims Ivy executives stayed silent because pulling their clients’ money entirely would have cost them millions of dollars in management fees. A 1998 internal e-mail from the fund’s CEO asked, “Are we prepared to ... have assets decrease by over $300 million and our overall fees reduced by $1.6 million or more ... if we terminate all Madoff related relationships?”

MONEY LOST: Ivy customers, including several union pension funds, wound up losing $227 million when Madoff’s notorious Ponzi scheme finally collapsed.