"Ivy Asset Management violated its fundamental responsibility as an investment advisor by putting its own pecuniary interests ahead of the interests of its clients. An investment advisor should apprise its clients of risks, but Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees. As a result, its clients suffered massive and avoidable losses."

Ivy was paid more than $40 million between 1998 and 2008 to give advice and conduct due diligence for clients who had made large Madoff investments; the company's investigations found that Madoff was not investing the funds as advertised.

The AG says that Ivy's internal documents revealed the company's deep but undisclosed reservations about Madoff, and did not reveal those concerns to its investment clients out of fears of losing the large fees associated with the accounts.

The result was a loss of more than $236 million when the Ponzi scheme collapsed, including not only individual investors but many New York union pension and welfare plans.

"The settlement agreement we're announcing today provides a measure of justice for those Americans who worked hard to prepare for their retirement and then saw hoped-for stability disappear," said Secretary of Labor Hilda L. Solis.

"My department is committed to ensuring that workers and retirees receive the benefits they've earned and deserve. If approved by the court, this settlement, combined with expected payments from the Madoff bankruptcy estate, will allow worker benefit plans impacted by Bernard Madoff's illegal and reprehensible scheme to recover all, or nearly all, of the money they invested with him."