Secretary of State William Galvin on Wednesday filed an administrative complaint against Fairfield Greenwich Group, a feeder fund connected to the $65 billion Ponzi scheme orchestrated by Bernard Madoff, to seek restitution for Massachusetts investors affected by Madoff’s operations. Massachusetts’ top securities regulator also hopes to levy an administrative fine against Fairfield Greenwhich, which the state claims to have invested over $7 billion with Madoff.
Galvin’s complaint alleged that Madoff “coached” Fairfield officials to duck regulatory inquiries concerning his investment practices. The state claims that the SEC closed its investigation into Madoff’s operation in 2007 without any findings, citing information provided by Fairfield Greenwhich. [via Bizjournals]
According to a document posted on Galvin’s Web site, the suit also alleges that Fairfield Greenwich earned hundreds of millions of dollars from its relationship with Madoff.
Read a statement from Fairfield Greenwich regarding the allegations.
“The allegations in the complaint brought against FGG by the Massachusetts Securities Division are false and misleading. Contrary to the allegations, FGG conducted vigorous and robust monitoring on an ongoing basis of the Madoff investments. This monitoring was consistent with the representations made to investors in the Sentry funds. FGG has fully and completely cooperated with the Massachusetts Securities Division investigation. Unfortunately, Massachusetts has leapt to erroneous conclusions without completing its investigation and without even granting a meeting with FGG in an attempt to arrive at an accurate understanding of the facts.” [WSJ]
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