NM Teachers Union Files Suit over Madoff Investments

June 30, 2009 (PLANSPONSOR.com) - A New Mexico teachers union has filed a lawsuit against Austin Capital Management Ltd. over investments made with Ponzi-schemer Bernard L. Madoff.

The Austin American-Statesman reports that the suit alleges Austin Capital breached its fiduciary duty, operated negligently and failed to do due diligence when it invested client money with Tremont Partners & Co., which in turn invested with Madoff. The National Education Association of New Mexico Inc. filed the state court lawsuit on behalf of the state Educational Retirement Board and the State Investment Council under a state law that allows private firms to sue to recover public money.

The lawsuit says the New Mexico agencies lost between $23 million and $25 million.

According to the news report, John Wertheim, the plaintiffs’ lawyer, said New Mexico law does not allow plaintiffs to ask for specific damages, but Austin Capital could be on the hook for up to $75 million if it loses the case.

The suit is one of several brought against Austin Capital over Madoff investments (see Law Firm Files Another Madoff-related Suit against Austin Capital ).