New York Attorney General Andrew M. Cuomo filed a lawsuit Tuesday against a Bank of New York Mellon Corp. unit and two of its executives, alleging that they "deliberately" misled clients about investments tied to Bernard L. Madoff.
The suit alleges that Ivy Asset Management LLC, its former chief executive officer, Lawrence Simon, and its former chief investment officer, Howard Wohl, deliberately "kept clients in the dark about damaging financial information about Madoff so Ivy could bring in millions in advisory fees."
According to the lawsuit filed in New York State Supreme Court in Manhattan, Ivy was paid more than $40 million from 1998 to 2008 to give advice and conduct due diligence for clients with large Madoff investments. The lawsuit said that, while conducting this due diligence, Ivy learned Madoff was not investing funds as advertised, but internal e-mails indicated it did not disclose this to clients for fear of losing fee revenue.
BNY Mellon, which bought Ivy in 2000, said that the complaint "relates to nondiscretionary advisory services that Ivy provided to a limited number of professional investment advisers who, in turn, chose to invest their own clients' assets with Bernard L. Madoff Investment Securities."