Tremont Group Sued By Investors Claiming Madoff-Related Losses

Date: Wednesday, December 24, 2008
Author: David Glovin, Bloomberg

Tremont Group Holdings Inc., a hedge-fund firm owned by Massachusetts Mutual Life Insurance Co., was sued for investing with money manager Bernard Madoff who confessed to a $50 billion Ponzi scheme.

Investors Arthur E. Lange and Arthur C. Lange sued Tremont, its parent and its units for investing with Madoff and ignoring numerous “red flags.” The Langes, in a complaint filed today in federal court in Manhattan, seek class-action, or group, status on behalf of other investors whom they say lost $3.1 billion.

Tremont “did not act as a reasonably prudent investor would have,” according to the complaint, which cites the fund’s decision to put “all of the class’s eggs in one basket.” The Langes invested with Tremont and said they lost their money.

The suit follows others against funds that invested with Madoff, including one naming Walter Noel’s Fairfield Greenwich Group, a hedge-fund firm that invested $7.5 billion, and others against Ezra Merkin’s Gabriel Capital LP and Ascot Partners LP.

A telephone call to Rye, New York-based Tremont wasn’t immediately returned. Massachusetts Mutual spokesman Jim Lacey didn’t have an immediate comment.

The Langes accuse Tremont of breaching its fiduciary duty and seek unspecified damages.

The suit is Lange v. Massachusetts Mutual, 08-cv-11117, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in U.S. District Court in New York at dglovin@bloomberg.net.