Department of Labor Sues Madoff Feeders and Managers

The U.S. Department of Labor had filed a lawsuit against several Madoff feeder funds and their managers and advisers alleging breach of fiduciary duty. The suit claims that the managers of the feeder funds served in a fiduciary capacity because they invested plan assets directly, advised with respect to investments of plan assets, or managed funds where total ERISA assets exceeded 25%. The DoL alleges that the defendants failed to protect plan assets by failing to conduct proper due diligence and investigate obvious red flags. The DoL seeks disgorgement of fees and complete restitution of all investor losses.