07.30.10

Lawsuit : Fred Wilpon Vaporized$16 Million Retirement Fund

Posted in Baseball, The Law, The Marketplace at 5:57 pm by

And you thought there’d be no big Mets news at the trading deadline! “While defendant Fred Wilpon has been quoted as claiming that he and his business family are ‘fine,’ his loyal employees (many of whom had previously been laid off) have lost their retirement savings.” So reads part of a complaint filed earlier today in Manhattan federal court claiming Mets principal owner Fred Wilpon’s investment firm, Sterling Equities of gross negligence. From Reuters’ Jonathan Stempfel :

The complaint said Sterling invested $16.2 million, or 92 percent, of the 401(k) plan’s $17.6 million of assets with Bernie Madoff.

It accused Wilpon and two other plan trustees of breaching their fiduciary duties to plan participants by mishandling investments with Madoff and his firm Bernard L. Madoff Investment Securities LLC.

The complaint seeks class-action status on behalf of plan participants, a number it estimates in the hundreds. There were 267 participants at the start of 2008, the complaint said.

The complaint was filed by Elyse Goldweber, a New Yorker who said she had $280,420 invested in her late husband’s individual 401(k) plan. A majority of this sum was invested directly with Madoff and has been “wiped out,” she said.

In October 2009, Irving Picard, the court-appointed trustee liquidating Madoff’s investment firm, said Mets LP, a team affiliate, withdrew $47.8 million more from Madoff’s firm than it put in. Picard has been trying to recover money from such former clients, whom he considers “net winners.”

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