A unit of BNY Mellon (BK) will pay $210 million to settle charges that it let clients invest funds with disgraced money manager Bernard Madoff despite its own concerns that Madoff was running a Ponzi scheme.

The settlement, announced Tuesday by New York's attorney general, ends litigation against Ivy Asset Management by the attorney general's office, the U.S. Department of Labor and varied private plaintiffs. Other defendants in the case will pay an additional $9 million as part of the settlement.

"An investment adviser should apprise its clients of risks, but Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees," New York Attorney General Eric Schneiderman said in a news release. "As a result, its clients suffered massive and avoidable losses."

Victims included hundreds of individual investors as well as dozens of New York union pension and welfare plans, according to Schneiderman’s office.

"Ivy is pleased to have reached an agreement that allows it to put these matters behind it," Douglas Squasoni, Ivy's chief investment office, said in a statement.

According to Schneiderman’s office, Ivy netted more than $40 million over a roughly 10-year period beginning in 1998 from advising and conducting due diligence on behalf of clients who had invested with Madoff.

Though reviews by Ivy revealed that Madoff was not investing the funds under his management as advertised, the firm allegedly withheld its doubts from clients for fear of losing fees it received and instead told clients it had no reason to believe there was anything improper about Madoff’s operation, Schneiderman’s office said.

According to Schneiderman’s office, internal documents belonging to the asset manager also revealed the firm’s reservations about Madoff, who staged a Ponzi scheme that ran decades and defrauded investors of roughly $17.3 billion.

The attorney general’s office sued Ivy in 2010, alleging fraud and breach of fiduciary duty. Proceeds from the settlement will be used to return money to investors and pay costs incurred by regulators in bringing the lawsuit.

As of Sept. 30, the trustee overseeing the liquidation of Madoff’s firm had recovered about $9.2 billion on behalf of investors.

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