The Bank of New York Mellon Wins Dismissal of Multiple Madoff Investor Lawsuits
August 8, 2014
Cleary Gottlieb won a full dismissal for The Bank of New York Mellon of three lawsuits brought in New York State Supreme Court against BNY Mellon in connection with the Bernard L. Madoff fraud. Plaintiffs were investors with Madoff or with certain “feeder funds” that, in turn, invested with Madoff. They alleged generally that BNY Mellon aided and abetted fraud and breaches of fiduciary duty by Madoff and/or the “feeder fund” managers, engaged in professional negligence in its administrative duties for failing to discover the Madoff fraud, and/or were liable for conversion or unjust enrichment in connection with plaintiffs’ Madoff losses. On August 8, 2014, Supreme Court Justice Richard Lowe issued opinions dismissing all claims against BNY Mellon, holding that plaintiffs failed to allege that BNYM had actual knowledge or provided substantial assistance with respect to any underlying fraud or breach of fiduciary duty, that fund administrators are not “professionals” and therefore cannot be held liable for professional negligence, and that plaintiffs failed to plead the elements of their conversion or unjust enrichment claims.