Now more ‘feeder fund’ investors are suing Madoff along with others. These two feeder funds are looking to recoup approximately $3.5 billion in alleged losses. Kingate Global Fund Ltd. and Kingate Euro Fund Ltd. filed their lawsuit in US District Court in Manhattan this week.
The lawsuit alleges that “[r]eportedly, over $3 billion was invested in Kingate Global and Kingate Euro, and virtually all of those moneys were funneled to Madoff.” A few months ago these two Kingate funds were sued by the trustee of Madoff’s investment company. The trusteee, Irving Picard sued to recover $255 million withdrawn from Madoff’s firm between October and November 2008. Picard’s lawsuit named fund manager Kingate Management Ltd.; Grosso’s FIM Advisers LLP, which acted as a consultant to the funds; and others as defendants.
The feeder fund lawsuit is an attempt to deflect the allegations made by the Madoff investment firm trustee Irving Picard that these two funds illegally profited from their association with Madoff.
The feeder funds will try to defend by saying they were victims too.
Time will tell, but if these money managers are half as astute as they (used to) like the public to believe I am not sure they will make a strong case.