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Tremont Market Neutral Fund may have concentrated 27% of its assets with Bernie Madoff.
Investigation Source (Case #08-cv-11359)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Investments
- Scams (Including Madoff)
- Unregistered Investments
- Registration Statement
- Audit Action
- Private Placement
- Lead Plaintiff Not Chosen
Product or Service
- Hedge Funds
Injury Type
- Monetary Loss
Investigation Details
This is a securities fraud class action lawsuit against Tremont Partners.
Tremont Partners is a wholly owned subsidiary of Tremont Group Holdings Inc., which is a wholly owned subsidiary of Oppenheimer Acquisitions, which in turn is a wholly owned subsidiary of Massachusetts Mutual Life Insurance Co.
Ernst & Young is also named as a defendant.
Tremont is the general partner of Tremont Market Neutral Fund, L.P. A "market neutral" fund that sought consistent returns while remaining neutral to the market direction. It turns out that Tremont Partners invested 27% of Tremont Market Neutral Fund with Bernard Madoff and his investment vehicles. Not so market neutral.
This case arises from a massive fraudulent scheme perpetrated by Bernard L. Madoff through his investment firm, Bernard L. Madoff Investment Securities, LLC ('BMIS?). On December 10, 2008, Madoff informed certain senior employees at BMIS that his investment advisory business was a fraud. Madoff stated that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme." Madoff communicated to the senior employees that he had for years been paying returns to certain investors out of the principal received from other, different, investors. Madoff stated that the business was insolvent, and that it had been for years. Madoff also stated that he estimated the losses from this fraud to be approximately $50 billion. On December 11, 2008, the SEC charged Madoff and BMIS, with securities fraud for a multi-billion dollar Ponzi scheme that Madoff and others perpetrated on advisory clients of BMIS.
One of those clients was Tremont Market Neutral Fund. Tremont Group, simply put, should have known much better than to concentrate such a large position in one fund and the auditors should have warned the investors.
Tremont Partners is a wholly owned subsidiary of Tremont Group Holdings Inc., which is a wholly owned subsidiary of Oppenheimer Acquisitions, which in turn is a wholly owned subsidiary of Massachusetts Mutual Life Insurance Co.
Ernst & Young is also named as a defendant.
Tremont is the general partner of Tremont Market Neutral Fund, L.P. A "market neutral" fund that sought consistent returns while remaining neutral to the market direction. It turns out that Tremont Partners invested 27% of Tremont Market Neutral Fund with Bernard Madoff and his investment vehicles. Not so market neutral.
This case arises from a massive fraudulent scheme perpetrated by Bernard L. Madoff through his investment firm, Bernard L. Madoff Investment Securities, LLC ('BMIS?). On December 10, 2008, Madoff informed certain senior employees at BMIS that his investment advisory business was a fraud. Madoff stated that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme." Madoff communicated to the senior employees that he had for years been paying returns to certain investors out of the principal received from other, different, investors. Madoff stated that the business was insolvent, and that it had been for years. Madoff also stated that he estimated the losses from this fraud to be approximately $50 billion. On December 11, 2008, the SEC charged Madoff and BMIS, with securities fraud for a multi-billion dollar Ponzi scheme that Madoff and others perpetrated on advisory clients of BMIS.
One of those clients was Tremont Market Neutral Fund. Tremont Group, simply put, should have known much better than to concentrate such a large position in one fund and the auditors should have warned the investors.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Tremont Group Holdings, Inc. | Tremont Group Holdings Inc. is a wholly owned subsidiary of Oppenheimer Acquisitions, which in turn is a wholly owned subsidiary of Massachusetts Mutual Life Insurance Co. Tremont Group Holdings, through subsidiaries, operates several hedge funds. |
| Massachusetts Mutual Life Insurance Company | Massachusetts Mutual Life Insurance Company, operates generally under the marketing name of MassMutual Financial Group. It provides insurance and financial services. |
| Ernst & Young | Ernst & Young is a professional services firm that performs, accounting, audit and consulting functions. |
| Tremont Partners, Inc. | Tremont Partners, Inc. is a wholly owned subsidiary of Tremont Group Holdings. It operates several hedge funds. |
| Oppenheimer Acquisition Corporation | Oppenheimer Acquisition Corporation is an asset management company. IT is a subsidiary of MassMutual and the parent. |