New York (HedgeCo.Net) – Mary Schapiro, who most recently was the CEO for the Financial Industry Regulatory Authority, is now the head of the Securities and Exchange Commission.  The Senate approved Schapiro yesterday, a month after being nominated President Barack Obama. 

Schapiro takes over the SEC at a crucial time, when the agency along with former head Christopher Cox received an abundance of bad press over lax regulation in a faltering economy. 

In a year where hedge funds have taken a beating and some of the world’s most reputable financial institutions have come crumbling down, all eyes are on the SEC as to how and why they could not prevent or foresee disaster.

Even as more light is shed on the Bernard Madoff debacle after losses amounting to over $50 billion, questions still arise as to how the agency could have missed the pink elephant in the room.  Schapiro, who has taken flak for clearing Madoff from fraud, says that the broker dealer watchdog did not have the jurisdiction to investigate his investment advisory business. 

Many are suprised at the appointment of Schapiro simply because she has been a staple in government regulation agencies since the Reagan era.  Some argue that this will not provide the "change" we need, especially since Schapiro was at the center of an agency that many feel is corrupt, or at the least, too forgiving.     

Schapiro is the first woman to chair the SEC. 

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: accredited-investors, advisory business, barack obama, bernard madoff, broker-dealer, christopher-cox, debacle, financial industry regulatory authority, financial-institutions, first woman, government regulation, hedgeco, mary schapiro, pink elephant, securities-and-exchange-commission, sister-sites, staple, watchdog

New York (HedgeCo.Net) – New York University scored a victory yesterday, when they won a court order that sought an extension on a temporary ban that would halt J. Ezra Merkin from making any more transfers with the school’s funds.  Merkin had millions of dollars of the University’s funds tied up in investments with Bernard Madoff.

Merkin, the man behind the Gabriel Capital LP fund and the Ariel Fund Ltd., is prohibited from withdrawing, transferring or liquidating assets, after a ruling from Supreme Court Justice Richard Lowe in a Manhattan courtroom yesterday.

According to the original complaint filed by NYU in late December, Merkin “was explicitly told” to stay away from Madoff related investments.  Merkin then allegedly invested with Madoff regardless of the orders, losing an estimated $24 million of the University’s funds with the Ponzi-schemer.

"In the face of an extraordinary number of red flags, Merkin, for years, simply turned over a substantial portion of Ariel’s funds to Madoff for management,” NYU alleges.

The University, who had $94 billion total invested with Merkin, fears that it may lose the entirety of its investment.

“Mr. Merkin has always acted in good faith and did not deceive NYU or any other investors,” said Andrew Levander, Merkin’s lawyer.

Gabriel Capital, which manages about $1.5 billion but posted losses of 39 percent in 2008, was planning to liquidate amidst the aftermath of the Madoff debacle, along with Ariel, but must have permission from the courts to do so first.   

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: accredited-investors, andrew levander, ariel, bernard madoff, courtroom, debacle, ezra, good faith, hedgeco, justice richard, merkin, new-york-university, nyu, red-flags, richard lowe, sister-sites, substantial portion, supreme court justice