Madoff case: Investor may have killed himself; retiree sues SEC

NEW YORK -- The founder of an investment fund that lost $1.4 billion with Bernard Madoff was discovered dead Tuesday after apparently committing suicide at his Madison Avenue office.

Rene-Thierry Magon de la Villehuchet was found sitting at his desk at about 8 a.m. with both wrists slashed, New York Police Department spokesman Paul Browne said. A box cutter was found on the floor along with a bottle of sleeping pills on his desk. No suicide note was found.

De la Villehuchet was one of several fund managers to be hit hard in Madoff's alleged $50 billion Ponzi scheme. Investment funds that lost big to Madoff are also facing backlash and investor lawsuits for not protecting their clients from the alleged fraud.

It is not immediately known what kind of scrutiny de la Villehuchet was facing over his Madoff losses through his Access International Advisors, located a couple of blocks from Rockefeller Center.

But on Monday night, he told cleaning crews in his building that he wanted them out of his office by 7 p.m. because he was going to be working late, Browne said.

Workers returned Tuesday morning and found the door locked. He was later discovered dead at his desk, with a garbage can placed near his body to apparently catch the blood, Browne said.

De la Villehuchet was a prominent investor who came from a long line of aristocratic Frenchmen, with the Magon part of his name referring to one of France's most powerful families.

His fund enlisted intermediaries with links to the cream of Europe's high society to garner clients. Among them was Philippe Junot, a French businessman and friend who is the former husband of Princess Caroline of Monaco.

De la Villehuchet, the former chairman and chief executive of Credit Lyonnais Securities USA, was also known as a keen sailor who regularly participated in regattas and was a member of the New York Yacht Club.

He lived in an affluent suburb in Westchester County with his wife. They have no children. There was no answer Tuesday at the family's two-story house, which has a majestic view of a pond.

"He's irreproachable," said Bill Rapavy, who was Access International's chief operating officer before founding his own firm in 2007.

The death came as a woman who says she gave Madoff $2 million to manage tried to hold regulators responsible for her losses, a case that shows how widely investors are casting their net in trying to find potential defendants in the scandal.

The claim by retiree Phyllis Molchatsky is believed to be the first attempt by an investor to recover investment losses from the U.S. Securities and Exchange Commission. Since Madoff was arrested, other investors have sued hedge funds they say improperly entrusted their money to him.

Molchatsky's lawyer said Tuesday the SEC failed to protect investors from Madoff, who has been charged with securities fraud by federal prosecutors but has yet to formally respond to the accusations in court.

"We believe in this particular instance that the SEC has fallen down on the job," said attorney Howard Elisofon, a former SEC lawyer who represents Molchatsky. "They should be held responsible for these catastrophic losses."

The SEC declined to comment.

Molchatsky brought an administrative claim on Monday against the commission, contending the agency was negligent in failing to detect the alleged $50 billion fraud at Madoff's money management operation.

Molchatsky, 61, of New City, New York, is seeking $1.7 million in damages from the agency.

She could face an uphill battle because the doctrine of sovereign immunity historically has limited the types of cases that could be brought against the SEC and other federal agencies.

The SEC has come under fire for not uncovering the Madoff scandal until the money manager's sons went to authorities and told them he had confessed to the fraud. The agency has been accused of missing a number of red flags about the way Madoff operated his investment business.