A new type of defendant emerged in the Madoff fallout this week as customers of Fiserv Investment Support Services, a former unit of Fiserv Inc. (FISV), filed a class action lawsuit on Thursday against Fiserv trying to recoup their lost money. The case has reportedly been filed in federal court in Denver by Jacob Zamansky of Zamansky & Associates on behalf of 800 investors who are hoping to recover up to $1 billion.

The lawsuit alleges that although Fiserv and its Fiserv Investment Support Services unit "were the designated ‘custodians’ for their pension and IRA accounts, that designation was pure fiction." In fact, the complaint alleges, Fiserv Investment Support Services improperly turned actual custody of their pension and IRA accounts over to Madoff, without their knowledge. The plaintiffs allege that "from beginning to end, Madoff's firm held and controlled the actual custody of their pension and IRA accounts, and their underlying cash," not Fiserv. It was not until the day Madoff was arrested in December 2008 that plaintiffs learned that custody of their accounts had been handed over to Madoff's firm, the complaint alleges.

The complaint also reportedly names TD Ameritrade Holdings Inc., as well, in a curious allegation related to its 2007 acquisition of about 300,000 retirement and custodial accounts from Fiserv. Plaintiffs allege that TD Ameritrade excluded any business involving customer accounts with Madoff Securities when it acquired these 300,000 accounts from Fiserv in 2007, and claim that "[t]his exclusion is highly suspicious because it appears that [TD] obtained actual knowledge of Mr. Madoff’s fraud through the due diligence process, which caused these assets to be excluded.” It is unclear from the reports what cause of action, specifically, is alleged against TD Ameritrade for this "suspicious" exclusion.