A lawsuit filed in Miami hopes to recover fees charged to invest in a fund that funneled money to Bernie Madoff's Fairfield Sentry fund.
Miami suit aims to get back fees paid in Bernard Madoff scandal
A lawsuit seeks to recover management fees a bank allegedly charged customers to invest in a fund that funneled money to convicted swindler Bernard Madoff.
A lawsuit filed in Miami hopes to recover fees charged to invest in a fund that funneled money to Bernie Madoff's Fairfield Sentry fund. AP FILE
Photo BY PATRICK DANNER
While lawsuits over the Bernard Madoff swindle proliferate, one investor suit seeking class-action status in Miami federal court is pursuing the recovery of fees charged to invest in a fund that funneled money to the convicted con man.
A Mexican couple on Friday sued London's Standard Chartered bank claiming the fees they paid the bank to invest in the Madoff feeder fund Fairfield Sentry were based on ''phantom or fraudulent valuations'' of the fund's assets.
The suit says the damages of the plaintiffs and the proposed class are more than $5 million. Standard Chartered placed about $300 million of investors' money in the Sentry fund, the suit alleges.
''The crux of the suit is what's lost is lost, unfortunately, but at the very least you have to give back the fees you did not earn,'' said David Rothstein, a Miami lawyer who filed the lawsuit in U.S. District Court in Miami.
Plaintiffs Jose Antonio Pujals and his wife Rosa Julieta A. de Pujals invested about $600,000 in the Sentry fund and paid about a half percent a year in management and administrative fees, or about $3,000, Rothstein said.
The suit seeks to recover the fees investors paid from June 2004 until December 2008, when Madoff's Ponzi scheme became known. Prosecutors have said Madoff told clients they had about $65 billion in accounts with him. Any claims to fees paid before June 2004 are barred by a statute of limitations, Rothstein said.
Standard Chartered and its private bank unit have Miami offices, according to the suit. Standard Chartered acquired American Express' international banking unit for $823 million last year.
A Standard Chartered spokesman in London had no immediate comment on the suit, but said as a matter of policy it doesn't comment on litigation.
''We are not suggesting Standard Chartered was part of Madoff's fraud,'' Rothstein said. ``In this suit, we are not seeking to recover all of client's losses. Rather, we are seeking to recover the fees charged that were not really earned. Our theory is, they shouldn't be allowed to benefit.''
Fairfield Greenwich Group, Sentry fund's manager, had about $7 billion invested with Madoff. It reportedly was the largest investor swindled. Fairfield Greenwich and the fund are not being sued in the case against Standard Chartered.