The trustee in charge of overseeing the firm once run by convicted Ponzi scheme operator Bernard Madoff has sued 43 new affiliates of Fairfield Greenwich Group and its founding partners, alleging they enriched themselves in the fraud.
An amended complaint, filed late Tuesday by court-appointed trustee Irving Picard, adds 25 Fairfield Greenwich affiliates and 19 individuals as defendants, The Wall Street Journal reported. Picard previously sued three Fairfield Greenwich hedge funds, which served as as "feeder funds" to Madoff, in May 2009.
The compliant alleges the affiliates were well aware of Madoff's fraud but looked the other way in their eagerness for profits. Fairfield Greenwich is believed to be Madoff's largest supplier of feeder funds, which are investment vehicles that supply money to a master fund.
"Sophisticated hedge fund investment advisers and promoters engaged in a systematic, purposeful enterprise with Madoff to maintain and profit from a fraud and wrongly enrich themselves," lawyers for Picard wrote in the complaint filed in U.S. bankruptcy court in Manhattan, Reuters reported. "The defendants were not victims," the lawsuit said. "They were enablers. They were facilitators."
"The defendants did not properly, independently, and reasonably perform due diligence into the many red flags strongly indicating Madoff was a fraud," according to the 217-page complaint. "The defendants did exactly the opposite."
Through a spokesman, the defendants denied the allegations.
Bonds for Beginners
Learn about fixed income investments.View Course »