Madoff will create a bonanza for lawyers as everyone will sue everyone else

Isn’t that weird that the biggest existing ‘Hedge Fund’ – the Madoff-whatever – was an open secret some people seem to have know about? As a vey good article in the NYT wrote that some tried out his strategy raising the claim he never could have executed it the way he suggested. As one of my clients told me about an insider group which always made money and one could only get in on an invitation basis a few years ago. I can imagine they were speaking of Madoff but it could also be the so called ‘club’ Armstrong mentioned in a recent expose he has written. I will put some excerpts of his writings soon in the blog as they are very intriguing. If you do not know, Armstrong had a computer model which predicted most major events perfectly accuratly and was put into prison without trial for 7 years as he refused to sell it to the CIA. The amazing thing is that the SEC had many warnings over a decade without ever acting on it, hence a lot of people can be blamed and sued – that will create a huge bonanza for the lawyers representing them – the problem will be that the non-existing $50 bil. was the foundation for other businesses, which is now in jeopardy (like real estate), as it was used as coletteral to fund and now all protect investors. What they really do, as Armstrong claims rightfully, is to keep the smaller players and firms overregulated so the big ones can move as they are pleased.

Fairfield Greenwich’s Madoff Investment Triggers Suit (Update1)

By Cynthia Cotts

Dec. 22 (Bloomberg) — Walter Noel’s Fairfield Greenwich Group, the hedge-fund firm that had $7.5 billion invested with Bernard Madoff, was sued by investors for allegedly failing to protect their assets.

Noel’s Greenwich Sentry fund invested $220 million with Madoff and his Fairfield Sentry fund invested $7.3 billion solely in Madoff, jeopardizing investors’ interests while collecting “millions of dollars in fees,” according to a complaint filed Dec. 19 in New York State Supreme Court in Manhattan.

Fairfield Greenwich Group founding partners Noel, Andres Piedrahita and Jeffrey Tucker are accused of breach of fiduciary duty, negligence and unjust enrichment, as are Brian Francouer and Amit Vijayvergiya of FG Bermuda, a Noel affiliate. The complaint was filed as a class action, or group, lawsuit on behalf of investors.

“FG defendants failed to perform even a minimum level of due diligence regarding the activities of Madoff,” according to the complaint.

Madoff, 70, was arrested Dec. 11 and charged with running an alleged $50 billion Ponzi scheme based on his own admission. He remains under house arrest in his New York apartment.

Noel, Tucker and Piedrahita didn’t immediately return calls seeking comment. comment AND that Fairfield Greenwich spokesman Thomas Mulligan didn’t have an immediate comment.

Noel’s 20-year business relationship with Madoff helped earn the group “millions of dollars in fees,” according to the complaint.

Fairfield Greenwich Group said it’s assessing its Madoff- related losses and is willing to cooperate with government investigations into the alleged fraud, according to a statement posted Dec. 16 on the fund’s Web site.

“We are seeking to gather all facts, work diligently with counsel to determine the appropriate course of action toward recovery, and stand ready to assist the authorities with their investigation,” the statement said.

Lead plaintiffs Pasha and Julia Anwar, who invested in Fairfield Greenwich funds, claim Noel’s team ignored the “red- flag warning” that Madoff’s investments produced small, steady gains in a declining market.


~ by behindthematrix on December 23, 2008.

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