Ivy Asset Management, a BNY Mellon Subsidiary, will pay $210 million to settle lawsuits claiming it advised clients to invest with Bernard Madoff despite harboring suspicions about the fraudster.

The settlement, reached with New York Attorney General Eric Schneiderman, concludes lawsuits against Ivy by the Attorney General, the US Department of Labor and private plaintiffs, providing the $210 million payment from Ivy as well as $9 million from other defendants.

The asset manager earned $40 million by giving advice and conducting due diligence for clients invested with Madoff, the authorities said. The due diligence process revealed that Madoff was not investing his funds as advertised, as, for example, there were insufficient options traded to support his purported trading strategy. When the firm questioned him on this, he gave three different answers, the statement said.

Ivy, a registered investment advisor, failed in its fiduciary duty and lost its clients over $236 million after Madoff’s Ponzi scheme collapsed, it continued.

“Ivy is pleased to have reached an agreement that allows it to put these matters behind it,” said Douglas Squasoni, chief restructuring officer and chief investment officer of Ivy Asset Management.

The $210 million will be used to return money to investors, pay the Attorney General’s fees and expenses, as well as those of the DOL and private plaintiffs. This money will add to other money these victims will receive from Irving Picard, the SIPC Trustee for the liquidation of Madoff’s estate.

It was not stated how much would be returned to investors versus covering fees and expenses, and the New York Attorney General’s office did not respond to an inquiry by the time of publication.

“When added to future amounts Madoff investors anticipate receiving from the Madoff bankruptcy proceeding, today's settlement is expected to return all or nearly all the original investment to those defrauded by the Ponzi scheme in this case,” Schneiderman said in the statement.