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November 13, 2012 at 07:49 AM
The Department of Labor announced Tuesday a settlement with Ivy Asset Management, a unit of the Bank of New York Mellon, in which Ivy will pay $210 million to compensate employee benefit plans and other investors who suffered losses through investments in Bernie Madoff’s Ponzi scheme.
The settlement was reached with Ivy Asset Management LLC, J.P. Jeanneret Associates Inc., Beacon Associates Management Corp., Andover Associates Management Corp., and their current and former owners and officers.
DOL sued Ivy, Jeanneret, Beacon, Andover and their owners and officers on Oct. 21, 2010, for alleged violations of the Employee Retirement Income Security Act. The suit alleged that they “breached their fiduciary duties to a number of benefit plans by recommending, making and maintaining investments with Madoff, thus losing hundreds of millions of dollars in assets needed for the pension and health benefits of thousands of workers.”
Under the settlement agreement, DOL says that Ivy and its principals have agreed to pay a total of $210 million. Jeanneret and its owners, John P. Jeanneret and Paul Perry, have agreed to pay $3 million. Beacon and Andover and their owners, Joel Danziger and Harris Markhoff, have agreed to pay $3.5 million and relinquish a claim of more than $3.3 million for management fees.
The settlement is pending approval by the U.S. District Court for the Southern District of New York and resolves department litigation, actions brought by New York’s attorney general, and several private lawsuits and class actions brought on behalf of plans and other investors that invested with Madoff.
Douglas W. Squasoni, chief restructuring officer and chief investment officer of Ivy Asset Management, said in a statement that “Ivy is pleased to have reached an agreement that allows it to put these matters behind it.”
Phyllis Borzi, assistant secretary for DOL’s Employee Benefits Security Administration, said in the release announcing the settlement, “Nothing can make up for the years-long agony that plan administrators and participants, and individual investors were put through by these defendants and Madoff. But this settlement should go a long way toward making victims financially whole and, hopefully, closing a painful chapter for many workers and families.”
