The largest "feeder fund" to Bernard Madoff's fraudulent investment scheme rejected Wednesday allegations by Massachusetts regulators who say it misled investors in its knowledge of Madoff's business.
Connecticut-based Fairfield Greenwich Group, whose Sentry funds lost $7.2 billion to Madoff, said the fraud allegations were "so filled with errors and factual distortions as to completely misstate the conduct" of the firm.
Madoff, 71, a former chairman of the Nasdaq stock market, was arrested on Dec. 11 and pleaded guilty on March 12 to charges accusing him of perpetrating a fraud worth as much $65 billion over 20 years. He is in jail pending sentencing.
Fairfield said consistent returns and low volatility from Madoff were expected given his supposed trading strategy, known as a "split strike conversion", along with Madoff's other supposed strategies including investments in Treasury bills.
Galvin's complaint said Madoff coached Fairfield executives, who once managed about $14 billion, on how to respond to questions from the Securities and Exchange Commissions in 2005.
Showing posts with label Fairfield Greenwich Group. Show all posts
Showing posts with label Fairfield Greenwich Group. Show all posts
Sunday, May 3, 2009
Friday, December 19, 2008
Feeder Fund’s Role Eyed in Madoff Mess
Fairfield Greenwich Group is coming under scrutiny as being one of the participants that extended Madoff’s alleged fraud into Europe. In marketing materials, the investment firm touted Madoff’s seemingly straw-into-gold “algorithmic technology.”
The Securities and Exchange Commission, as part of an investigation into Mr. Madoff's activities, determined in 2006 that the fund, Fairfield Greenwich Group, hadn't properly disclosed that Mr. Madoff oversaw its investment decisions, according to an SEC document, though the agency found no evidence of fraud.
Since then, Fairfield Greenwich has in marketing documents touted its close relationship with Mr. Madoff -- and in the process raised about $1.7 billion from investors in the U.S. and Europe. This marketing effort ultimately broadened the scope of Mr. Madoff's alleged fraud far from his bases in New York and Florida.
There is no suggestion that Fairfield knew of Mr. Madoff's improper activities. A Fairfield spokesman says the firm trusted Mr. Madoff after a 19-year relationship and conducted due diligence of his activities.
The spotlight on Fairfield comes as prosecutors and regulators attempt to unravel Mr. Madoff's alleged fraud; he has told investigators he conducted a $50 billion Ponzi scheme in which he paid investors returns from subsequent client money he raised.
The Securities and Exchange Commission, as part of an investigation into Mr. Madoff's activities, determined in 2006 that the fund, Fairfield Greenwich Group, hadn't properly disclosed that Mr. Madoff oversaw its investment decisions, according to an SEC document, though the agency found no evidence of fraud.
Since then, Fairfield Greenwich has in marketing documents touted its close relationship with Mr. Madoff -- and in the process raised about $1.7 billion from investors in the U.S. and Europe. This marketing effort ultimately broadened the scope of Mr. Madoff's alleged fraud far from his bases in New York and Florida.
There is no suggestion that Fairfield knew of Mr. Madoff's improper activities. A Fairfield spokesman says the firm trusted Mr. Madoff after a 19-year relationship and conducted due diligence of his activities.
The spotlight on Fairfield comes as prosecutors and regulators attempt to unravel Mr. Madoff's alleged fraud; he has told investigators he conducted a $50 billion Ponzi scheme in which he paid investors returns from subsequent client money he raised.
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