|
Massachusetts Mutual Life Insurance Co. failed in its responsibility to protect clients from investing their money with Bernard L. Madoff Investment Securities, a Berman DeValerio attorney told The Boston Globe.
Clients of hedge funds that lost $3.3 billion by investing in Bernard L. Madoff's billion Ponzi scheme say the funds’ parent companies must share in the blame for their losses, according to lawsuits filed by Berman DeValerio.
The lawsuits allege that Oppenheimer Acquisition Corp. and Oppenheimer’s parent, Massachusetts Mutual Life Insurance Company, breached their fiduciary duty and failed to protect investors in three different hedge funds managed by a company they control, Tremont Partners Inc.
In a May 5 article, The Boston Globe further reported that top MassMutual executives in 2001 were deeply involved in conducting due diligence, which the insurer was planning to buy at the time. Raising the red flag then about Tremont’s investment of its hedge funds in Madoff was the Hennessee Group, a New York advisor to large investors, the Globe, reported. In an article the next day in the Globe, Massachusetts Secretary of State William Galvin said that his office is investigating MassMutual’s relationship with the Tremont hedge funds.
"They were driving the train," Bryan A. Wood, a Berman DeValerio partner, said about MassMutual in the Globe he fact that MassMutual senior executives were so intimately involved in the due diligence in the purchase of Tremont demonstrates the control that they exerted over all their subsidiaries." Massachusetts trust funds and other investors have lost $3.3 billion in Rye Select Broad Market Fund LLP, which Tremont managed. Tremont had the second-largest losses among Madoff clients, the Globe, reported.
The suits filed by Berman DeValerio, one of which was featured in a front-page article in The Boston Globe on April 20, were filed in U.S. District Court in Boston and in Massachusetts Superior Court. Dozens of suits have been filed against Madoff and his New York investment firm, Madoff Investment Securities LLP.
The plaintiffs in Berman DeValerio’s suit argue that the trust fund represented by the firm purchased Rye Select expecting to benefit from the expertise of MassMutual and Oppenheimer, which portrayed themselves as the umbrella company to Tremont.
Wood described the defendants as "reckless" in their investments and said the firm also disregarded other red flags that pointed to Madoff’s massive scam. For example, Tremont promised clients that it would closely track Madoff’s investments and strategy, yet ignored repeated warning signs that the investment was unsound, including unrealistically strong year-over-year performance and "extreme secrecy" by Madoff in marketing the fund and reporting on its performance, the complaint said.
In March, Madoff pleaded guilty to operating a $65 billion global Ponzi scheme.
To read one of Berman DeValerio’s complaint, click here. To read the latest Globe article, click here.
To read Madoff article dated May 5, 2009 click here, and for the Madoff article dated April 20, 2009, click here. |
