Another day, another Madoff-related suit. This latest, a proposed class-action, against Walter Noel‘s Fairfield Greenwich fund, was filed yesterday Manhattan federal court by LA-based Pacific West Health Medical centre Inc. Employees Retirement Trust.
The trust isn’t thrilled with Fairfield Greenwich’s fees from Madoff—estimated to be at least $450 million since 2000, for the 20% of profits, not including the 1% of assets under management in addition, tacked on starting in 2004.
West Pacific wants at least $1 billion in fees returned.
Economic News Online: Fairfield “claimed to be caught unaware of this massive Ponzi scheme,” the trust alleged. “Had the defendants properly performed the necessary due diligence, red flag warnings would have alerted them to this scheme much earlier.”
Fairfield founding partners Noel, Andres Piedrahita and Jeffrey Tucker are accused of breach of fiduciary duty, negligence, unjust enrichment and breach of contract, as are other executives including Brian Francouer and Amit Vijayvergiya of FG Bermuda, a Noel affiliate.
Bloomberg: “The fees were inappropriately paid because they were based on assets and performance that didn’t exist,” the trust’s lawyer, Robert Finkel of the firm Wolf Popper in New York, said in a phone interview. “They didn’t actually earn that money and they’re obligated to return it to investors.”
“The company did indeed perform extensive due diligence,” said Thomas Mulligan, a Fairfield Greenwich spokesman.
The case, Pacific West Health Medical centre Inc. Employees Retirement Trust v. Fairfield Greenwich Group, 09-cv- 00134, U.S. District Court, Southern District of New York (Manhattan), is the second class action suit we know of filed against Fairfield Greenwich. The first lawsuit, filed December 19 in Manhattan, names the firm’s three co-founders Walter M. Noel Jr., Jeffrey Tucker and Andres Piedrahita and executives Brian Fancouer and Amit Vijayvergiya as defendants, alleging that they failed their duty on multiple fronts by placing so much money with Bernie Madoff.