Asset Protection for Money Managers, Investment Advisors and Financial Professionals
(Or, We hate to say “I told you so” #2, but look here)
by Asher Rubinstein, Esq.
New York’s attorney general has sued Ivy Asset Management, a hedge fund manager, and two of its former executives, its CEO and its CIO, claiming that they knew years ago that Bernard Madoff was a fraud, but did not disclose that knowledge to the fund’s investors.
Attorney general suits against hedge funds are not new. Lawsuits related to Madoff’s fraud are not new. But recently, we have seen more and more lawsuits filed against fund managers and investment advisors personally. In other words, the plaintiffs not only target the funds or financial institutions, but the people who make the investment decisions, naming these people personally and putting their personal assets at risk.
We wrote about this development just last week; please click here.
In that article, we discuss why indemnification is often of little comfort. We outlined domestic and international asset protection strategies that will effectively protect personal assets from these kinds of claims.
Recent events make clear the need for asset protection by financial professionals. Following the charges filed last month by the Securities and Exchange Commission against Goldman Sachs, there is a real possibility that individual Goldman Sachs executives may face government investigation and charges. Investors in Goldman products may also file civil charges, in addition to charges filed by the government. In today’s news, Morgan Stanley is being investigated for wrongdoing in connection with investment activities. Actions against Morgan Stanley executives are a possibility also. The need for asset protection by financial professionals is continually reinforced in today’s climate.
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