MassMutual hedge fund sued in loss
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A Boston law firm has filed a class-action lawsuit against a hedge fund controlled by Massachusetts Mutual Life Insurance Co. for placing all of the fund's assets with Bernard Madoff, who is facing life in prison for conducting a massive fraud.
The lead plaintiff is Lawrence J. Rothschild, a Needham businessman who invested about $1.1 million with the Rye Select Broad Market XL Fund, according to the lawsuit, filed yesterday in Massachusetts Superior Court.
The suit alleges that Rye did not explicitly say that it placed all of its assets with Madoff, and that the firm's parent, Tremont Partners Inc. (also part of MassMutual), ignored red flags about Madoff's activities.
In a statement, MassMutual said, "Some of our affiliated entities are among the many victims of the illegal activities perpetrated by Bernard L. Madoff Investment Securities. MassMutual has strong defenses to this complaint and we will defend ourselves vigorously."
Also named in the suit, filed by the Boston law firm Berman DeValerio, are MassMutual and several individuals and businesses linked to the Springfield insurer.
Bank of New York Mellon Corp. is named as well, as administrator of the hedge fund. Bank of New York Mellon declined to comment late yesterday.
