Citco Reaches $125 Million Settlement With Madoff Victims

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Citco Group Ltd. agreed to pay $125 million to settle investor claims that it contributed to billions of dollars in losses by improperly administering funds that went to con man Bernard Madoff.

U.S. District Judge Victor Marrero gave preliminary approval to the deal on Thursday. The settlement is one of the biggest with a custodian or administrator of a Madoff feeder fund.

Investors will be notified of the agreement and Marrero will hold a hearing on final approval in November, according to the judge’s order. Citco denied any wrongdoing as part of the proposed settlement.

Citco was hired by Fairfield Greenwich Group, the biggest operator of feeder funds that channeled money into Madoff’s Ponzi scheme, to keep shareholders informed of the performance of their investments and to verify financial details of the fund, according to the lawsuit.

Citco knew that investors were relying on the company’s services and owed them “a duty of care,” according to the complaint.

Marrero’s final approval of the settlement would leave units of PricewaterhouseCoopers LLP as the only remaining defendants in the lawsuit. The Citco deal would cap more than six years of litigation and two years of negotiations, according to the settlement proposal filed Wednesday in Manhattan federal court.

Earlier Settlement

Marrero approved an $80.3 million settlement between Fairfield Greenwich and investors in 2013. Fairfield placed about $7 billion with Bernard L. Madoff Investment Securities LLC.

Almost 3,000 investors claimed a portion of the settlement amount paid by Fairfield Greenwich, David Barrett, a lawyer for the plaintiffs, said in an interview. The Citco settlement, if approved, would probably cover about the same number, Barrett said.

The case is Anwar v. Fairfield Greenwich Group Ltd., 09-cv-00118, U.S. District Court, Southern District of New York (Manhattan).

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