kaal:claim:2811718-027

Madoff's reliance on large feeder funds created a massive industry of investor due diligence lawsuits, because those funds collected high advisory fees as due diligence experts yet caused large numbers of investors to lose their investments.

Source quote, verbatim

created a massive industry for IDD lawsuits.148 The feeder funds had collected high advisory fees as due diligence experts, but caused large numbers of investors to lose their investments as a result of the Madoff fraud.

From

Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016), III.B.3. Impact of the Madoff Ponzi Scheme, p. 43
https://ssrn.com/abstract=2811718 · source PDF

Cite as

Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718

Holds when

post 2008 Madoff related litigation

Classification

mechanismsupport: arguedfailure: delegated diligence collapsefamily: agency-cost-and-managerial-opportunismlaw-and-legal-systems

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