Fairfield Greenwich Group Rejects Massachusetts Accusations

BOSTON, April 29 /PRNewswire/ -- Fairfield Greenwich Group (FGG) today filed
legal papers that thoroughly reject fraud allegations by Massachusetts
regulators in connection with the Madoff scandal. Referring to an April 1
complaint by the Massachusetts Securities Division, FGG stated: "The
complaint here was rushed into existence and is so filled with errors and
factual distortions as to completely misstate the conduct of the companies
that make up the Fairfield Greenwich Group."

The filing describes how, since its initial "test" investment with Madoff in
1989 and the launch of its first Sentry fund in 1990, FGG continually and
regularly enhanced its diligence and risk monitoring capabilities to keep pace
with evolving industry standards and growth of the Sentry funds. The filing
outlines FGG's oversight through quantitative monitoring based on daily trade
confirmations and monthly brokerage statements, price checking, asset
verification and access. The filing notes that PricewaterhouseCoopers,
retained by FGG to audit the Sentry funds, consistently issued clean audit
opinions, and also references the additional oversight by the National
Association of Securities Dealers (NASD) and the Securities and Exchange
Commission (SEC). Given FGG's robust monitoring over the course of nearly
twenty years, the assertion that FGG failed to conduct diligence in a manner
amounting to fraud is entirely inconsistent with the objective facts.

FGG's diligence and risk management practices were consistent with its
representations to Sentry investors, and the Sentry Offering Memoranda made
clear that Madoff held substantially all of the funds' assets, the filing
states. FGG's filing further provides that the Massachusetts complaint
misleadingly quotes marketing materials never intended to apply to Sentry and
omits other materials needed for a fair reading of the FGG materials.

The filing also reveals how the complaint inaccurately portrayed a December
2005 call between Madoff and FGG personnel, in preparation for an interview by
the SEC. As the filing points out, FGG asked the SEC for permission to speak
to Madoff prior to the call, and then discussed the Madoff call with the SEC
after the call. Most importantly, records clearly show that FGG personnel
responded truthfully to the best of their knowledge to all questions asked by
the SEC. The complaint's allegations that FGG took "instructions" from Madoff
and "tailored" answers to the SEC are demonstrably false.

The filing also addresses a number of factual errors and misleading omissions
in the complaint. The filing points out:
-- Madoff honored over three billion dollars in redemption requests from
the Sentry funds;
-- the "split-strike conversion" strategy was designed to
deliberately limit potential volatility;
-- many well known investment vehicles outperformed Sentry's returns
and consistency; and

-- Madoff purported to make only a few actual trading decisions, and was
purported to be invested in treasury bills the rest of the time,
which,
by definition, yielded a steady positive return.

These points directly contradict the complaint's assertion that FGG should
have known Madoff was operating a Ponzi scheme.

"It is clear that the complaint proceeds on theories of 'guilt by association'
and 'fraud by hindsight,'" the filing states. "The 'profound disparity' in
this case is not, as the complaint alleges, between the diligence and risk
monitoring practices of FGG and its representations to investors, but rather
between FGG's actual conduct and the grossly unfair and misleading description
of that conduct in the complaint."

SOURCE Fairfield Greenwich Group

Thomas Mulligan, +1-212-573-6100 - office, +1-310-367-6567 - mobile, or Seth
Faison, +1-212-573-6100 - office, +1-310-467-5841 - mobile, both for Fairfield
Greenwich Group