* One of largest settlements of private Madoff litigation
* Settlement requires court approval, could grow
* Madoff trustee also pursuing claims
* Tremont pleased to settle, denies investors' claims
By Jonathan Stempel
NEW YORK, Feb 25 Investors who lost money in
Bernard Madoff's Ponzi scheme have reached a $100 million
settlement with a group of funds affiliated with Tremont Group
Holdings Inc that funneled their money to the now imprisoned
The settlement filed Friday evening in Manhattan federal
court followed mediation to resolve claims against Tremont,
which is part of Massachusetts Mutual Life Insurance Co.
Tremont and its now defunct Rye Investment Management unit
lost more than $3 billion of client money it funneled to Madoff
and his firm Bernard L. Madoff Investment Securities LLC.
The investors alleged that Tremont failed to conduct
adequate due diligence, and "turned a blind eye to the red
flags" it had about Madoff's activities.
The class-action settlement requires court approval, and is
among the largest reached in private litigation by investors
who lost money with Madoff.
These investors may recover additional sums through
litigation undertaken by Irving Picard, the court-appointed
trustee seeking money from victims of Madoff's fraud.
Friday's accord "is a tremendous result," Andrew Entwistle,
a partner at Entwistle & Cappucci LLP representing the
investors, said in an interview. "We are hopeful of a final
resolution with the Madoff trustee in the near future."
Kevin McCue, a spokesman for Picard, did not immediately
return a request for a comment.
A Tremont spokesman, Montieth Illingworth, said the firm
was pleased to resolve the investors' claims, "which we have
vigorously denied, and on terms that will enable investors to
recover some of the losses" from Madoff's fraud.
Entwistle said the settlement could grow by $50 million as
other Tremont funds wind down and separate litigation is
"There aren't too many of these lawsuits against Madoff
feeder funds whose parents are still solvent," Reed Kathrein, a
partner at Hagens Berman Sobol Shapiro LLP also representing
the investors, said in an interview. "We got everything that we
could have possibly gotten from Tremont."
Madoff pleaded guilty in March 2009 to running a Ponzi
scheme that prosecutors estimated at $65 billion. He is serving
a 150-year prison sentence.
The case is In re: Tremont Securities Law, State Law and
Insurance Litigation, U.S. District Court, Southern District of
New York, No. 08-11117.
(Reporting by Jonathan Stempel in New York; Editing by Bernard