New York AG Andrew Cuomo today sued a “fund-of-funds” unit of Bank of New York Mellon for fraud related to Bernard Madoff’s Ponzi scheme.
DealBook reports that the AG’s lawsuit against Ivy Asset Management and two of its former top officers alleges that although the business had discovered that Madoff was not investing in the manner he had described, it “refrained from telling investors for fear of losing out on lucrative fees.” The individual defendants are Ivy’s former CEO Lawrence Simon and its former CIO Howard Wohl.
Cuomo alleges that Ivy discovered “apparent holes” in Mr. Madoff’s stated investment strategy as far back as 1997, but decided not to disclose to clients their suspicions about Madoff’s operation.
