Mets Management Beaned by 401(k) Suit

According to Reuters, Mets owner Fred Wilpon has been sued by Elyse Goldweber, the wife of late Sterling Equities employee David Sloss, who claims that her 401(k) nest egg has been scrambled as a result of dealings with infamous Ponzi schemer Bernie Madoff.  Sterling owns the Major League Baseball team,  

The suit, filed in the U.S. District Court in Manhattan, is seeking class-action status on behalf of other Sterling employees, hopes to “recover assets that were lost through imprudent investments made on its behalf.” It names Sterling executives Arthur Friedman and Michael Katz as co-defendants, as well as Mets Chief Executive Officer Fred Wilpon. 

Goldweber claims that her now-deceased husband had accumulated $280,420 in his 401(k) account with Sterling Equities, which owns the Mets, but that the money has since been “wiped out.”  The suit further claims that Sterling Equities sent Goldweber an account statement in March warning her not to rely on the funds being available because of the Madoff entanglements, according to the New York Post.  

At the time Madoff disclosed in December 2008 that his $65 billion investment venture had collapsed, Wilpon said his family and his business weren’t in financial jeopardy, the lawsuit said, according to Reuters.  “Defendant Wilpon’s statement that his family and his business family were all ‘fine’ did not take into account the loss of the retirement savings of many of his employees,” the lawsuit said.  

“Thus, while defendant Wilpon has been quoted as claiming that he and his business family are ‘fine,’ his loyal employees (many of whom had previously been laid off) have lost their retirement savings,” the suit contends, according to Reuters.  In a company filing cited by Goldweber in the suit, roughly 92% of the firm’s retirement plan assets ($16.2 million of the firm’s $17.7 million in retirement plans) was tied up with Madoff.

Madoff, of course, is serving a 150-year prison term for perpetrating the $65-billion Ponzi scheme that devastated thousands of investors.

“We believe the complaint has no merit,” the Great Neck, New York-based company said in a statement. “The Sterling Equities 401(k) Plan and its participants were among the many victims of the Madoff fraud”, noting that it has filed a claim with the Securities Investor Protection Corporation or SIPC, and assisted participants with filing claims.  “We believe the participants who were defrauded by Madoff are entitled to the full protection of SIPC and are therefore eligible to be reimbursed for all their losses as is provided under the law,” the company said in its statement.