nvestment managers Meridian Diversified Fund Management LLC and J.P. Jeanneret Associates Inc. were sued in separate cases for placing client money with convicted conman Bernard Madoff.

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April 21 (Bloomberg) -- Investment managers Meridian Diversified Fund Management LLC and J.P. Jeanneret Associates Inc. were sued in separate cases for placing client money with convicted conman Bernard Madoff.

The complaints, filed yesterday in federal court in Manhattan, seek unspecified damages on behalf of fund investors. Meridian Diversified placed as much as 8 percent of its clients’ money with Madoff, according to a complaint. Jeanneret was an adviser to the Income-Plus Investment Fund, which also invested with Madoff.

The suits are the latest by investors whose funds wound up with Bernard L. Madoff Investment Securities LLC. Prior suits have targeted Madoff feeder funds including Fairfield Greenwich Group and Gabriel Capital LP.

“Unbeknownst to Income-Plus investors, defendants failed to perform the necessary due diligence that they were being compensated to perform as investment advisors,” according to a statement issued by the law firm bringing that case, Lowey Dannenberg Cohen & Hart.

Also named in one of the Income-Plus suits is Bank of New York Mellon Corp.’s Ivy Asset Management LLC, which served as an adviser to the Income-Plus fund. Ivy Asset was previously sued over its advice to another fund that invested with Madoff.

Meridian’s Investment

Peter Brown, general counsel for New York-based Meridian Capital Partners, which is also a defendant in that case, said in an interview that Meridian invested in a unit of Tremont Group Holdings Inc., which invested with Madoff. He declined to comment further. Meridian Capital, the parent of Meridian Diversified, is an alternative investment adviser.

Pen Pendelton, a spokesman for Jericho, New York-based Ivy Asset, said Ivy isn’t the investment manager of the Income-Plus fund, and that the Bank of New York isn’t affiliated with the fund or its investment manager.

“We intend to defend ourselves vigorously,” Pendleton said.

Representatives of Syracuse, New York-based Jeanneret didn’t immediately return a call seeking comment.

The Meridian suit, filed by a pension fund for engineers, claims the firm breached its duty to investors by placing money with Madoff. A pension fund for plumbers and steamfitters in New York, which filed the Jeanneret suit, accuses the firm of failing to investigate Madoff.

Madoff’s Fraud

Madoff pleaded guilty on March 12 to defrauding investors by using money from new ones to pay off old ones in a massive Ponzi scheme. Before the fraud came to light, Madoff told investors they had $65 billion in his firm’s accounts, prosecutors said. Madoff, 70, is in custody awaiting sentencing in June. He faces as many as 150 years in prison.

The cases are Pension Trust Fund for Operating Engineers v. Meridian Diversified Fund Management, 09-cv-3955, U.S. District Court, Southern District of New York (Manhattan) and Local 73 Annuity Fund v. J.P. Jeanneret Associates, 09-cv-3907, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net.

Last Updated: April 21, 2009 15:30 EDT
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