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Case Status:    SETTLED
On or around 07/17/2013 (Other)

Filing Date: January 27, 2009

According to a press release dated February 2, 2009, a class action lawsuit in the United States District Court, Southern District of New York, against defendants Beacon Associates Management Corp. (“Beacon Associates”), Joel Danziger, Esq. (“Danziger”), Harris Markhoff, Esq. (“Markhoff”), Ivy Asset Management Corp. (“Ivy Asset Management”), the Bank of New York Mellon Corporation (“BONY”), Friedberg Smith & Co., P.C. (“Friedberg Smith”) and John Does 1-100 (collectively, the “Defendants”), on behalf of all persons, other than Defendants, who invested in Beacon Associates LLC I (the “Fund”) from August 9, 2004 until the present (the “Class Period”), and derivatively on behalf of the nominal defendant, Beacon Associates LLC I, to recover damages caused by Defendants’ violations of the federal securities laws and common law claims, including breach of fiduciary duties.

The Complaint asserts that during the Class Period, unbeknownst to investors, Defendant Beacon Associates, the Managing Member of the Fund, concentrated more than half of the Fund’s investment capital with entities managed by Bernard Madoff (“Madoff”) or Madoff-related entities. Investors who entrusted their savings to Beacon Associates suffered millions in damages as a result of Madoff’s fraudulent scheme.

This Complaint alleges that Defendants failed to perform the necessary due diligence that they were being compensated to perform as investment advisors, managers and fiduciaries, and proximately caused millions of dollars in losses. Defendants either knew or should have known that the Fund’s assets were employed as part of a massive Ponzi scheme orchestrated by Madoff. Defendants ignored numerous red flags, including the abnormally high and stable positive investment results reportedly achieved by Madoff regardless of market conditions; inconsistencies between Bernard L. Madoff Investment Securities, LLC’s (“BMIS”) publicly available financial information concerning its assets and the purported amounts that Madoff managed for clients; and the fact that BMIS was audited by a small, obscure accounting firm.

Additionally, Defendants Beacon Associates, Danziger and Markhoff issued an Offering Memorandum that was false and misleading because it falsely stated that the Fund’s assets would be invested in a number of investment vehicles, including a “Large Cap Strategy adopted by Beacon Associates itself, when in reality, unbeknownst to investors, the vast majority of the assets in the Fund were invested in Madoff-controlled entities. The Offering Memorandum also falsely stated that Beacon Associates would monitor the Fund’s performance as well as the performance of each third party manager of the Fund’s assets, to ensure that they adhered to their stated investment objectives. Plaintiffs allege that Defendants Beacon Associates, Danziger, Markhoff, and Ivy Asset Management, with no or inadequate due diligence or oversight, abdicated their responsibilities and entrusted the Fund’s assets to Madoff-run investment vehicles. Plaintiffs further allege that Defendant Friedberg Smith failed to conduct a proper audit of the Fund’s financial statements. Finally, Plaintiffs allege aiding and abetting claims against Ivy Asset Management and BONY.

Plaintiffs have alleged claims on behalf of the Class for violations of Sections 10(b) and 20(a) of the Exchange Act, Rule 10b-5, as well as common law fraud, negligent misrepresentation, breach of fiduciary duty, gross negligence and mismanagement, unjust enrichment, and aiding and abetting claims. Plaintiffs are also suing derivatively on behalf of the Fund for breach of fiduciary duty, gross negligence and mismanagement, unjust enrichment, and aiding and abetting.

On May 13, 2009, an order consolidating actions, appointing lead plaintiff and appointing lead counsel was entered into the court record. October 1, 2009, an amended complaint was filed against the defendants in this action. The defendants responded by filing several motions to dismiss on June 11, 2009.

On April 21, 2010, proceedings were held before Judge Leonard B. Sand. According to the Minute Entry, the oral argument was held. Plaintiffs' have sixty (60) days to amend complaint, which they did on June 21, 2010.

On October 6, 2010, an Opinion and Order was issued by the Court granting in part and denying in part the defendant’s motion to dismiss. The defendants filed a motion for reconsideration of that order on October 19, 2010, which was denied on December 7, 2010.

On March 14, 2012, the Court issued an Order granting the motions to certify class.

On November 30, 2012, the Court issued a Preliminary Approval Order Providing for Notice and Hearing in Connection with Proposed Settlement. On May 9, 2013, the Court issued an Order approving the Settlement and awarding attorneys' fees and expenses. The Court issued an amended version of this Order six days later.

On May 29, 2013, the Court issued an order and final judgment granting private plaintiffs' counsels' motion for award of attorneys' fees and granting the plaintiffs' class counsels' motion for reimbursement of expenses.

COMPANY INFORMATION:

Sector: Financial
Industry: Investment Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol:
Company Market: Privately Traded
Market Status: Privately Held

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 09-CV-00777
JUDGE: Hon. Leonard B. Sand
DATE FILED: 01/27/2009
CLASS PERIOD START: 08/09/2004
CLASS PERIOD END: 01/27/2009
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 09-CV-00777
JUDGE: Hon. Leonard B. Sand
DATE FILED: 06/21/2010
CLASS PERIOD START: 08/09/2004
CLASS PERIOD END: 12/11/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lowey Dannenberg Cohen & Hart, P.C. (New York)
    One North Broadway , Lowey Dannenberg Cohen & Hart, P.C. (New York), NY 10601-2310
    914.997.0500 914.997.0500 · mail@lowey.com
No Document Title Filing Date