Participants in the Madoff investment scandal the receiver assigned to Madoff's Ponzi scheme, extracted a settlement from Tremont worth over one billion dollars. A $1 billion class-action federal lawsuit was filed in Colorado against Fiserv, Inc. of Brookfield, Wisconsin whose subsidiaries were custodians for pension or IRA accounts and invested with Madoff. The complaint alleges Fiserv failed "to hold and safeguard assets entrusted to it" by about 800 Madoff customers who had been told to hire Fiserv to handle their accounts with him. Fiserv is accused of breach of fiduciary duty, fraud, negligence and aiding and abetting breach of fiduciary. Fiserv sold its investment account administration
Pyramid scheme recruitment costs. In a pyramid scheme, an organization compels individuals who wish to join to make a payment. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit. The directors of the organization (those at the top of the pyramid) also receive a share of these payments. For the directors, the scheme is potentially lucrative—whether or not they do any work, the organization's membership has a strong incentive to continue recruiting and funneling money to the top of the pyramid. Such organizations seldom involve sales of products or services