Three funds are suing BNY Mellon and its subsidiary BNY Alternative Investment Services for “gross negligence” in relation to convicted fraudster Bernard Madoffs Ponzi scheme, according to numerous reports.
In a complaint filed with the New York State Supreme Court on Dec. 9, 2011, BNY Mellon and BNY Alternative Investment Services, which served as administrator and custodian to the Rye funds, turned a blind eye to Madoff’s $65 billion scheme and reaped tens of millions of dollars and fees from the Rye funds, whose assets were entrusted to the custodian and fund administrator.
The funds claim the custodian and administrator abdicated any notion of professional and fiduciary responsibility to the Rye funds and their investors, helping to funnel billions of dollars into Madoff’s scheme.
The plaintiffs are seeking unspecified compensation and punitive damages.
Tremont Partners served as investment manager to the funds.
In an emailed statement, BNY Mellon said: We believe that the allegations in the complaint are baseless and intend to defend ourselves vigorously.
(JDC)