BANK of New York Mellon is “disappointed” that New York attorney general Andrew Cuomo sued its Ivy Asset Management unit, claiming it kept clients in the dark about investing with Bernard Madoff, BNY Mellon’s chief financial officer said at a conference yesterday.
The bank cooperated fully with Cuomo’s office and was disappointed the attorney general proceeded with the complaint, Chief financial officer Thomas Gibbons said at a conference in New York.
“We do expect litigation expense to run a bit higher”, he said, adding that he believes the company is adequately reserved.
Cuomo’s office claims Ivy Asset Management knew as early as 1997 that putting money with Madoff’s investment firm was risky, but it did not disclose that to clients for fear of losing fees.
BNY Mellon has owned Ivy since 2000 but is liquidating the unit in a process expected to take a couple of years.
Ivy Asset Management said on Tuesday it intends to defend itself against the lawsuit.