Madoff investors find accounts offer no protection

Fiserv denies responsibility, saying it is merely a custodian for self-directed accounts.

"We simply process transactions initiated by customers," the company said in an e-mail responding to questions. "It is not our role to advise clients about the decisions they make."

But lawyers for investors in the California and Florida cases take issue with that.

"That's exactly what Fiserv has said and will probably continue to say," said Kara Wolke, an attorney with the Los Angeles firm of Glancy Binkow & Goldberg, which represented investors in the case that was settled. "But basically our case was there comes a point where they know when something's bad because they're professionals in the industry."

Robert Pearl, a Naples, Florida, attorney who represents investors in cases against Fiserv, said his clients were relying on the company to be the "gatekeeper" for their investments. The investors were only allowed to direct their cash through accounts open with Fiserv, he said, even though they should have been able to go to any vendor offering self-directed IRAs.

"You could not use an IRA custodian other than Fiserv if you wanted to invest your money with Pearlman," Pearl said.