New York (HedgeCo.Net) – New York University is the latest victim in Bernard Madoff’s web of lies, claiming it lost $24 million in a fund of fund that invested with the infamous Ponzi schemer.
According to a complaint filed Christmas Eve in a Manhattan court, J. Esra Merkin invested NYU’s money with Madoff through two of his funds, Gabriel Capital LP and Ariel Fund Ltd., without telling investors and without performing proper due diligence.
Gabriel Capital, which manages approximately $1.5 billion, is planning to liquidate in light of the Madoff losses and because the fund posted losses this year of around 39 percent. A Manhattan judge has barred Merken from liquidated Ariel until a hearing set for January 6th. NYU said it had about $94 million invested in the Ariel Fund.
NYU spokesman John Beckham explained that Merkin “was explicitly told this was not a proper investment vehicle,” when he brought up Madoff. According to NYU however, Merkin had already invested the money with him.
Madoff was arrested on December 11th after an alleged confession to his sons in which he admitted that his firm was one “giant Ponzi scheme.” It is estimated that investors will lose a total of $50 billion, making this the largest Wall Street scam in history.
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