A former unit of Fiserv Inc. that invested retirement plan money with Bernard Madoff should have recognized his Ponzi scheme after repeated warnings from a financial adviser, according to an amended lawsuit filed last week against the Brookfield, Wis., banking technology vendor.
Customers that entrusted the former Fiserv unit with custody of their retirement plans are suing the company to recoup money lost in the Madoff scam. The lawsuit, filed in U.S. District Court for the District of Colorado, in Denver, seeks to recover up to $1 billion on behalf of 800 investors.
An amended version of the suit filed Thursday alleges that investment consultant Rogerscasey LLC, which subadvised Fiserv's retirement funds, issued several warnings about Madoff.
"Fiserv had to know of Rogerscasey's suspicion about Madoff," according to the lawsuit.
Rogerscasey warned that Madoff didn't use a prime broker or an administrator to complete transactions, averting independent scrutiny, the lawsuit says. Further, the consultant said Madoff might be "making up its statements," according to the lawsuit.
Fiserv did not return a telephone call seeking comment.
Fiserv has not been implicated in any wrongdoing related to Madoff's Ponzi scheme. The company sold its investment support services unit in 2007 in two transactions.
However, the lawsuit seeks to hold the company accountable for what it alleges went on at the unit for years before it was sold.