The Fairfield Greenwich Group has agreed to pay an $8 million settlement to a small group of investors in Massachusetts that lost money through the Madoff scam. This is expected to be a full repayment. Fairfield is also going to pay a $500,000 fine to the Commonwealth of Massachusetts. As part of the deal, the feeder fund does not have to admit any wrongdoing.
According to a report in USA Today, this is the first Madoff case in which a regulator secured some relief for investors. While this only addresses a relative handful of investors, the Massachusetts Secretary of State believes that it may become a precedent for other actions.
Fairfield agreed to the settlement because it wants to "avoid drawn-out hearings and significant legal bills" and "focus its time and resources on other legal claims involving many more investors."
The feeder fund was accused of not having performed basic checks on Madoff's fund through the course of an 18-year business relationship.
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