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WSWS – New York State Attorney General Andrew Cuomo on Monday charged J. Ezra Merkin, a multi-millionaire hedge fund manager and former chairman of GMAC Financial Services, the financial arm of General Motors, with bilking investors out of $2.4 billion by funneling their money, without their knowledge, to convicted Ponzi scheme operator Bernard Madoff.
According to the civil complaint filed by Cuomo with the New York Supreme Court, Merkin collected $470 million in management and incentive fees over a fifteen-year period by claiming to be carefully managing the money his clients invested in his three hedge funds, while funneling the bulk of the funds to Madoff’s operation.
Insurance giant Aviva could end the practice of lending shares to hedge funds in a move against short-selling.
Aviva shares were battered on the stock market earlier this month – losing 40pc of their value in two days – amid claims that short-sellers were looking to make quick profits by driving down the company’s share price.
Now Aviva directors are said to favour bringing to an end the company’s involvement in lending shares from its own investment portfolio to hedge funds.
West Palm Beach (HedgeCo.net) – Hedge fund manager Arthur Nadel is scheduled for a bail hearing in federal court in Tampa this afternoon.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
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New York (HedgeCo.Net) – Missing hedge fund manager Arthur Nadel, who disappeared last week along with an estimated $350 million of investor’s money, turned himself in to the FBI yesterday.
The Sarasota resident, 76, turned himself in at a Tampa office, accompanied by his legal team and his partner, Todd Foster. In the courtroom later that day, his lawyer Barry Cohen told the judge that Nadel has been “visiting with the psychiatrist the past week” after “suffering some emotional problems.” The judge postponed the bail hearing for three days.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
Nadel reportedly wrote a letter to his wife before he missing. According to reports, he allegedly told her to withdraw as much cash as she could before their accounts were frozen.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
