Madoff investors find accounts offer no protection

Fiserv's role was to send investors their balance statements and dispense checks to them. In return, Fiserv charged the investors a fee.

Much of the money trusted to Madoff through Fiserv reflects decades-long relationships. Some investors say they opened self-directed IRAs as far back as the 1970s with a Florida company, Retirement Accounts Inc. Over time Fiserv acquired Retirement Accounts and several of its competitors, merging them in 2004. Today the merged business manages about 135,000 IRA accounts.

The company has not been implicated in any wrongdoing related to Madoff. But twice before investors have blamed Fiserv and its subsidiaries for failing to protect them.

In a California class-action lawsuit settled last year, a Fiserv subsidiary paid $8.5 million to elderly victims of a long-running Ponzi scheme that made investments through self-directed IRAs administered by the Denver company. The investors lost about $100 million. A separate lawsuit against Fiserv, brought by about 40 investors in the same scam, is ongoing.

More recently, investors sued Fiserv in the wake of a $300 million Ponzi scheme run by Louis J. Pearlman, the Florida impresario who created boy bands 'N Sync and the Backstreet Boys. The suits, filed in December, accused the company of turning a blind eye to fraud.