In SDNY, on September 26, 2016, the Defendants motion to dismiss was granted in part and denied in part, and all of Plaintiffs’ claims were dismissed. The judgement was based upon an opinion filed by Judge Batts on September 21, 2016. The case in SDNY was subsequently closed, as a result. However, Plaintiffs moved to appeal the decision and filed a notice to appeal in the 2nd Circuit on October 12, 2016. Kingate is now in the 2nd circuit court of appeals pending further judgment.
On August 18, 2010, the Court entered a decision and order denying in part and granting in part the motions to dismiss filed by Defendants. On December 22, 2009, Defendants filed motions to dismiss the Second Consolidated Amended Complaint. On September 29, 2009, Plaintiffs filed the Second Consolidated Amended Complaint on behalf of shareholders and/or equity holders of four Fairfield Greenwich Group/Madoff feeder funds. These funds include: Fairfield Sentry Limited, Fairfield Sigma Limited, Greenwich Sentry, L.P., and Greenwich Sentry Partners, L.P.
On March 11, 2009 the lawsuit was filed in the United States District Court for the Southern District of New York on behalf of individuals who acquired the shares of Fairfield Sentry Limited (the “Fund”) between March 11, 2004 and December 10, 2008 (the “Class”).
This case arises from a massive, fraudulent scheme perpetrated by Bernard L. Madoff (“Madoff”) through his investment firm, Bernard L. Madoff Investment Securities, LLC (“BMIS”), and others, and which was facilitated by other named Defendants.
The Complaint alleges that during the Class Period, Defendants issued to the investing public false and misleading financial statements and press releases concerning, among other things, the Fund’s reported net asset value, the manner in which the Fund’s assets were invested, the extent of the Defendants’ due diligence of Madoff and BMIS, and the true state of supervision and oversight over the Fund’s assets.
Defendants caused and permitted $7.5 billion of the Fund’s total assets to be handed over to Madoff to be “invested” for the benefit of the Class. Class members’ investments with the Fund were decimated as a direct result of the fraud perpetrated by Madoff and BMIS and the complete failure of the Fairfield Defendants to properly discharge their fiduciary duties despite the existence of a myriad of “red flags” indicating a high risk to Fairfield Sentry from concentrating its investment exposure in Madoff.
On December 10, 2008, Madoff informed certain senior BMIS employees that BMIS’ investment advisory business was an utter fraud. Madoff also stated that he estimated the losses from this fraud to be approximately $50 billion. On December 11, 2008, SEC and criminal charges were brought against Bernard Madoff.
One of Madoff’s clients was Defendant Fairfield Sentry Limited, which, unknown to Class members, and notwithstanding assertions to the contrary, failed to monitor or supervise the investments made with Madoff and BMIS, and failed to perform adequate due diligence. Investors who entrusted their savings are now ruined. Indeed, scores of charities were destroyed and have either closed their doors or cancelled their proposed grants.
The case name is: In re Kingate Management, Case No. 16-3450, U.S. Court of Appeals for the Second Circuit.