BNY Mellon Escapes Madoff Feeder Fund Class Action

A New York state judge dismissed a class action against BNY Mellon on Tuesday, saying the plaintiffs had failed to prove the investment bank showed gross negligence in ignoring key warning signs in Bernard Madoff’s notorious $65 billion Ponzi scheme that caused investors massive losses. New York Supreme Court Judge Marcy Friedman granted BNY Mellon’s motion to toss the case, saying lead plaintiffs Entwistle & Cappucci LLP, Hagens Berman Sobol Shapiro LLP and Bernstein Liebhard LLP — all of which represented Madoff investors known as the Rye Funds — had not accused the bank of any extraordinary negligence or misconduct, which would be required in order to pursue damages. “It does not allege that defendants breached, let alone recklessly disregarded, any contractual duty. … The law also does not impose any additional tort duty, or duty independent of contract, to exercise reasonable care,” the decision said. More on Law360 here.