Walter Noel??s Fairfield Greenwich Group, the hedge-fund firm that had $7.5bn invested with Bernard Madoff, was again sued by investors over claims it failed to protect their assets.
Fairfield Greenwich should return at least $1bn in fees it wrongfully accepted from investors, according to a proposed class-action, or group, lawsuit filed yesterday in Manhattan federal court by a Los Angeles-based retirement trust.
Pacific West Health Medical Center Inc. Employees Retirement Trust claims that Fairfield Greenwich failed to act on warnings found in news reports and in meetings with Madoff, who was arrested on Dec. 11 after allegedly admitting he ran a $50bn Ponzi scheme.
Fairfield ??claimed to be caught unaware of this massive Ponzi scheme,? the trust alleged. ??Had the defendants properly performed the necessary due diligence, red flag warnings would have alerted them to this scheme much earlier.?
Fairfield founding partners Noel, Andres Piedrahita and Jeffrey Tucker are accused of breach of fiduciary duty, negligence, unjust enrichment and breach of contract, as are other executives including Brian Francouer and Amit Vijayvergiya of FG Bermuda, a Noel affiliate.
??The fees were inappropriately paid because they were based on assets and performance that didn??t exist,? the trust??s lawyer, Robert Finkel of the firm Wolf Popper in New York, said yesterday in a phone interview. ??They didn??t actually earn that money and they??re obligated to return it to investors.?
