In re Optimal U.S. Litigation

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION1

This putative class action arises out of plaintiffs’ investment in the Optimal Strategic U.S. Equity Fund (“Optimal U.S.” or *302the “Fund”), which in turn invested one-hundred percent of its assets with Bernard L. Madoff and his firm, Bernard L. Madoff Investment Securities LLC (“BMIS”). Plaintiffs allege that defendants failed to conduct adequate diligence regarding Ma-doff, ignored “red flags” that should have alerted them to Madoff s fraud, and made misstatements and omissions in connection with the sale of Optimal U.S.…