Madoff Feeder Fairfield Greenwich Charged With Fraud

Massachusetts Secretary of State William Galvin is charging the Fairfield Greenwich Group with fraud. The feeder funds that put billions of dollars into Bernie Madoff’s Ponzi scheme has maintained that it is a victim, just like any other investor. Many have been sceptical, however, that money managers so close to Madoff for decades could have been blind to his misdeeds.

The charges, as reported on CNBC moments ago, do not accuse FGG of knowingly aiding the Ponzi scheme. Rather, they accuse FGG of misleading its investors about the level of diligence they did on Madoff. The firm had assured investors that it kept a close eye on Madoff, a promise that now seems highly doubtful in light of the professed ignorance of Madoff’s scam.

MORE:

FGG’s web site used to feature an extensive description of the detailed due diligence the firm purportedly conducted on managers like Madoff.  These claims have since been removed from its web site, but we have them here >

FGG partner Andres Piedrahita paid himself $45 million a year to feed money to Madoff.  Walter Noel and Jeffrey Tucker paid themselves $30 million apiece.

FGG knew Madoff’s auditor was a one-man shop.  FGG told clients it was a “small to medium-sized financial services” specialist.

FGG paid its general counsel $1.5 million AFTER the Madoff fraud was disclosed >

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.