Mass. regulator will not settle Madoff feeder suit

Financial Crisis Posted on

Massachusetts' top securities regulator is trying to locate all investors who lost money in Bernard Madoff's Ponzi scheme and said he has no plans to settle a lawsuit against one of the swindler's feeder funds.

Secretary of State William Galvin, one of the first state regulators to probe Wall Street's biggest-ever investment fraud, is sending notices to newspapers and investment advisers to try to locate all Massachusetts residents who invested with Madoff.

The move comes a few weeks after Fairfield Greenwich Group, the hedge fund firm that invested heavily with Madoff, offered to repay fully the losses Massachusetts investors suffered, Thomas Mulligan, a spokesman for the firm said.

Mulligan said the negotiations between the regulator and Fairfield Greenwich are continuing.

Galvin's office is particularly interested in finding people who invested indirectly with Madoff by putting their money into funds that ultimately handed the cash to his firm, Galvin's spokesman Brian McNiff said.

"These could be people who had no idea that their money was being invested with Bernie Madoff," McNiff added.

Galvin's office has probed the Wall Street fraud that wiped out thousands of private investors plus charities and endowments since shortly after Madoff confessed to the crime in the middle of December.

McNiff said it is impossible to know now how many Massachusetts residents had money with Fairfield Greenwich Group, a main Madoff feeder fund, on December 11, 2008, when Madoff confessed to his scheme and who might come forward.

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