On Tuesday, December 23, 2008, an investor with Tremont Group Holdings has filed a proposed class action lawsuit on behalf of individuals and groups that invested capital with Tremont Group Holdings in a United States District Court in New York against Tremont Group Holdings, its Rye Investment Funds, Oppenheimer Acquisition Corporation, OppenheimerFunds, which owns Tremont, Massachusetts Mutual Life Insurance Company, a majority owner of OppenheimerFunds and KPMG LLP, Tremont's auditor over alleged grossly neglected fiduciary duties by turning capital over to Bernard Madoff Investment Securities (BMIS) that used the capital to run a massive Ponzi scheme.
According to the complaint the plaintiff alleges that that Tremont Group Holdings and other affiliated entities failed to perform proper due diligence and failed to vet, monitor, oversee, and safeguard Plaintiffs' investments, before handing all of it over to Bernard Madoff Investment Securities and as a result, Tremont Group Holdings clients lost a total of $3.3 billion in assets, $3.1 billion from the Rye Funds.

The investor alleges that Tremont Group Holdings turned over virtually all capital invested in its Rye Funds, estimated at $3.1 billion, to Madoff. While relinquishing management to Madoff, Tremont continued to receive management fees from clients and the company provided account statements and other documentation that made it appear as though Tremont Group Holdings had active oversight of clients' capital, so the lawsuit.