Kevin Lacroix of D & O Diary is keeping track of the Madoff-related litigation here. He writes a post here about a new ERISA case filed in the Eastern District of Pennsylvania. Excerpt:
There are a number of interesting things about this lawsuit. The first is that it seeks relief under ERISA. So far as I am aware, this is the first Madoff-related lawsuit asserting claims under ERISA. The interesting thing about an ERISA class action, as opposed to a securities class action, is that the ERISA action is not subject to the PSLRA’s discovery stay and other procedural requirements. So the ERISA plaintiff is free to conduct discovery even while the dismissal motion is pending.The opportunity under ERISA to avoid some of the challenges of litigating under the federal securities laws clearly was one of the plaintiffs’ attorney’s motivations in bringing the action. The Law.com article linked above quote the attorney as saying that ERISA provides “an easier and quicker route in repairing the damage.”
Additional excerpt:
The final interesting thing about this lawsuit is what it says about just how broad the pool of Madoff-related defendants has become. The plaintiff pension fund in this lawsuit did not invest with Madoff. It did not even invest with a Madoff feeder fund. Instead, it invested with an investment advisor that invested with a feeder fund that in turn invested with Madoff. (Got that?) The sheer span of these increasingly remote connections required to establish the Madoff-related link underscores just how widespread the Madoff litigation may yet become.
You can access the complaint here and a copy of the press release here from the law firm bringing the case.
The plaintiff, a pension fund, is alleging breach of fiduciary duty under ERISA for failure “to sufficiently investigate the Madoff-related funds to insure that they were a safe, prudent, honest and suitable investment for employee pension benefit plans and their participants and beneficiaries” and for failure “to locate or give sufficient attention to warning signs about the unreliability of Madoff-related funds as investment vehicles.”