A huge part of tens of billions lost by Bernie Madoff often came from feeder funds. Their investors often paid high fees — and, it turns out, did not get much much “added value” from their alleged money managers.
Now, Madoff victims are suing to get those fees back. A group is going after Standard Chartered Bank for up to $7.5 million it collected for sending some $300 million of its clients’ cash to Fairfield Greenwich Group, a notorious Madoff feeder.
New York Post: The investors claim Standard Chartered Bank blindly handed over the funds to Walter Noel’s Fairfield Sentry fund and then collected the fees on “phantom valuations,” provided by Madoff. The demand for the return of fees, which came in a lawsuit filed in Miami this month, is the first time victims have lashed out at investment bank fees.
“It is our view that this case is indisputable,” said Scott Dimond, the lawyer representing the victims. “We are not seeking the return of the principle investment here, we simply believe that Standard Chartered should not have been collecting fees for investing in assets that did not exist.”
Standard wouldn’t comment, but the Post notes that more Madoff related suits against it and other investment banks could come if this claim is successful.
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