An investor filed a proposed securities class action lawsuit in federal court in Massachusetts on behalf of investors in Rye Select Broad Market Fund LP, a hedge fund managed by Tremont Partners Inc. that placed money with Madoff.
According to the complaint the plaintiff alleges that Massachusetts Mutual Life Insurance Company and its agents bear legal responsibility for investing client funds with Bernard L. Madoff Investments without conducting adequate due diligence.

The complaint names Tremont, its controlling entity, Oppenheimer Acquisition Corp., and Oppenheimer’s parent company, Mass Mutual. Although it was filed in U.S. District Court in Boston, it makes claims under Massachusetts state law.

As of November 2008, Rye Select Broad Market stated it had $2.4 billion in assets under management. That money has disappeared, according to the lawsuit, which claims the defendants had designated Madoff to manage Rye’s assets since 1994. Tremont reportedly invested a total of $3.1 billion with Madoff, who in December admitted to authorities that he operated a $50 billion Ponzi scheme. The lawsuit, which is seeking class action status, claims that the defendants knowingly and recklessly misrepresented and/or omitted material facts to clients about their investments and breached their contractual and fiduciary duties to investors.