Second law firm files class action against Austin Capital Management over Madoff - Legal Action vs Fund Advisors who placed $

Second law firm files class action against Austin Capital Management over Madoff

Austin Capital sued by pension fund over Madoff loss

A San Diego law firm is the second to file a class action lawsuit against local hedge fund manager Austin Capital Management Ltd. over its role in the Bernard Madoff debacle.

Coughlin Stoia Geller Rudman & Robbins LLP filed the suit on behalf of investors in Austin Capital hedge funds during the period between Jan. 2, 2005 and Dec. 11, 2008. The suit seeks to recover losses resulting from Austin Capital's placement of investors' money into funds managed by confessed Ponzi-scheme organizer Madoff and his firm.

The action also includes a sub-class of those employee benefit plans that invested with Austin Capital during the same period, asserting claims under the Employee Retirement Income Security Act of 1974 for breach of fidiciary duty.

The complaint charges Austin Capital, its investment managers and its outside auditors with violations of the Securities Exchange Act of 1934 and ERISA.

Austin Capital oversees hedge fund investment portfolios for individual and institutional clients. An estimated 7.5 percent of funds managed by Austin Capital were invested with Madoff.

Executives with Austin Capital could not immediately be reached for comment.

According to a statement from the law firm, the suit seeks to recover damages on behalf of all investors in Austin Capital hedge funds during the three-year period.

In February, Philadelphia-based law firm Spector Roseman Kodroff & Willis filed a similar class action suit led by the Pension Fund for Hospital and Health Care Employees â€” Philadelphia and Vicinity and a class of similar funds.

Also in February, the Massachusetts Pension Reserves Investment Management Board, which oversees $38 billion, earlier this month decided to fire Austin after losing $12 million in the Madoff scheme.