This is a securities class action brought on behalf of limited parters of the Fm Low Volatility Fund.
Family Management Corporation was general partner in a limited partnership called FM Low Volatility Fund. Fulvio & Associates, LLP acted as FM Low Volatility's independent auditor.
Family Management concentrated more than half of the FM Low Volatility Fund's investment capital with three hedge funds: Andover Associates LLC I, Beacon Associates LLC I, Maxam Absolute Return Fund, LP. Andover, Beacon and Maxam were "funds of funds" which invested in yet other hedge funds. Andover, Beacon and Maxam heavily invested in entities managed by Bernard Madoff or Madoff-related entities.
This is a securities class action lawsuit against the named parties above and their respective decision makers alleging that they failed to perform the necessary due diligence that they were being compensated to perform as investment advisors, managers and fiduciaries. Defendants either knew or should have known that the FM Low Volatility's assets were employed as part of a massive Ponzi scheme orchestrated by Madoff, or that Madoff otherwise reported purported results that would have been impossible to achieve under his split-strike conversion strategy, and took no steps in a good faith effort to prevent or remedy that situation, proximately causing millions of dollars of losses. Additionally, Family Management issued an Offering Memorandum that was false and misleading because it falsely stated that Family Management would not invest more than 35% of FM Low Volatility's net asset value with any one investment vehicle, but, in reality, more than 60% of FM Low Volatility's assets were funneled through three "fund of funds" hedge funds. The Offering Memorandum also falsely stated that Family Management would:
(i) endeavor to verify the integrity of each manager of a "fund of fund" in which FM Low Volatility was invested;
(ii) attempt to monitor the performance of each manager; and
(iii) request detailed information regarding the historical performance and investment strategy of each of the selected investments for FM Low Volatility.
Plaintiffs allege that Defendants, with no or inadequate due diligence or oversight, abdicated their responsibilities and entrusted the FM Low Volatility assets to Madoff-run investment vehicles
Name (Stock Symbol)
Family Management Corporation
Family Management Corporation is an asset manager and investment advisory firm. It is general partner in FM Low Volatility Fund, L.P., which was a fund of funds (i.e. invested in other hedge funds). Many of the funds, Family Management Corporation invested in lost money with highly concentrated positions in entities owned by Bernie Madoff.
Beacon Associates Management Corporation
Beacon Associates Management Corporation is the investment advisor and general partner to Beacon Associates LLC I.
Maxim Group LLC
Maxim Group LLC is an investment bank, securities, and investment management firm.
Maxam Capital Management
Maxam Capital Management is the investment advisor for Maxam Absolute Return Fund, LP, which had a concentrated position with Bernie Madoff.
Maxam Absolute Return Fund, LP
Maxam Absolute Return Fund, LP is a hedge fund which was nearly 100% invested with Bernie Madoff.
Fulvio & Associates, LLP
Fulvio & Associates, LLP is an accounting firm.
Beacon Associates LLC I
Beacon Associates LLC I is a hedge fund. Unfortunately, its investment advisors placed half its investment capital with Madoff.
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