There’s been some talk of Fairfield Greenwich pulling a stunt like this, but as far as we know, this is the first time one of Madoff’s feeder funds is suing its own auditors. Maxam Capital, the fund-of-funds run by Sandra Manzke filed Friday to sue Goldstein Golub Kessler and McGladrey & Pullen for negligence, claiming their “unqualified” confidence in the firm’s financial holdings turned out to, um, not exactly be true.
Said a lawyer for Maxam: “Maxam intends to purse its legal rights to ensure that proper restitution is made to its investors.”
Maxam, of course, was the fund-of-funds group run by Sandra Manzke, who barely a week before Madoff was busted made this big deal about how the hedge fund industry needed to improve its ways. Apparently using an outside auditor to do the due diligence that the fund itself ought to have been doing fit into Manzke’s vision of good hedge fund governance.