The Madoff fallout is going to cost Fairfield Greenwich $8 million.
The company, which been called a Bernie Madoff feeder fund, reached a deal with Massachusetts’ secretary of state about 24 hours before the finance company was supposed to appear at a state hearing.
Fairfield Greenwich agreed to pay Massachusetts Madoff victims full restitution, plus interest.
Secretary of State William F. Galvin said this should "become the template" for similar deals with Connecticut, New York and other states with victims.
A dozen or so Fairfield Greenwich investors committed $8 million to firm which, in turn, invested with Madoff, who’s in jail for conducting a multibillion-dollar Ponzi scheme.
Company officials have said they had no idea that Madoff was anything other than a legitimate broker and brilliant market timer.
The state of Massachusetts claims that Madoff gave Fairfield Greenwich execs instructions to steer SEC attorneys away from any indication that he was actually acting as an investment advisor because Madoff was not registered to be an investment advisor at the time. This, in turn, deceived investors, according to the state’s argument.
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According to the settlement, Fairfield Greenwich neither admits nor denies the charges.
