Money managers under the microscope
Madoff and the lawyers’ bonanza
Oh what a tangled web we weave when first we practise to deceive, wrote Scottish novelist Sir Walter Scott, and anyone looking into the alleged Madoff fraud may well understand what he means.
Funds, advisors, auditors, fund administrators and custodians are looking around nervously and trying to understand whether they are likely to face lawsuits. Some are pre-empting that by taking out lawsuits themselves.
In certain cases investors and/or funds are suing auditors, administrators or advisers. Some investors are also looking carefully at the offering documents of their funds to see whether they have been misled over due diligence practices or fund strategies.
Other investors again are eying the custodians and asking themselves what in the world they were “custodying”.
It looks like being a free-for-all in the law courts. The only sure-fire winners are the lawyers, who must be rubbing their hands together with glee.