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Law.com – Goodwin Procter partner David B. Pitofsky was appointed Monday as receiver of the $1.7 billion Ascot fund put together by financier J. Ezra Merkin, almost all of which was invested with Bernard L. Madoff and lost.
Justice Richard B. Lowe appointed Pitofsky receiver in a lawsuit (People of the State of New York v. Merkin, 450879/09) brought by the New York attorney general’s office seeking recovery from Merkin of $2.4 billion in his client’s funds which he had "recklessly" invested with Madoff despite "clear warning signals" that the funds were being mishandled.
Boston Globe – It’s been a bad few months for New York financier J. Ezra Merkin. First, his hedge funds lost $2.4 billion in the Bernard Madoff swindle. Then, he lost his post as chairman of GMAC Financial Services.
Now, he’s parting with his prized art collection.
Bombarded by lawsuits accusing him of fraud, Merkin and his wife have arranged to sell their impressive collection of paintings by abstract expressionist Mark Rothko, as well as some valuable sculptures by Alberto Giacometti, according to legal papers filed yesterday.
An anonymous buyer has agreed to pay $310 million for the trove, the filing said.
Denver Post – J. Ezra Merkin, a hedge-fund manager who invested billions of dollars of clients’ money with swindler Bernard Madoff, has agreed to relinquish control of his funds to court-appointed trustees.
The attorney general’s office had requested the move in connection with its civil fraud lawsuit accusing Merkin of convincing clients he was managing their money when he was actually funneling $2.4 billion to Madoff’s Ponzi scheme.
The deal, which is expected to be approved by a judge Thursday, is not a settlement in the case, the attorney general’s office said.
New York Daily News – Ezra Merkin should have known better, a lawsuit claims.
The Park Avenue hedge fund king funneled investments to Bernie Madoff and received millions in fees Merkin knew were the spoils of a massive Ponzi scheme, a lawsuit filed Thursday claims.
U.S. Bankruptcy Court trustee Irving Picard sued Merkin to recover the $557.8 million Merkin and his Gabriel Capital Corp. have withdrawn from Madoff’s firm since 1995.
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.
Reuters – Hedge fund founder Ezra Merkin is being cooperative with New York state’s top legal officer in its investigation of three funds as part of the probe into accused swindler Bernard Madoff, officials said on Wednesday.
New York Attorney General Andrew Cuomo is seeking information from Merkin and his Gabriel Capital Corp, Ariel Fund Ltd and Ascot Partners funds, Cuomo’s office said last month.
All of the funds have been sued by nonprofits and individual investors who accuse them of investing with Madoff without their knowledge.
New York Daily News - Jacob Ezra Merkin was once revered as a wizard of Wall Street, an angel of charity and a lion of Judaic studies.
Now he has earned infamy as a destroyer of wealth, a menace to philanthropy, a pariah in some synagogues and a target of a probe by the state attorney general’s office.
A single unforgivable deed capsized his fortune, reputation and social standing overnight: He embraced a false prophet of profit named Bernard Madoff.
International Herald Tribune – J. Ezra Merkin, a New York financier, wrote his investors last month that he too was shocked by the news that Bernard Madoff’s hedge fund was an elaborate Ponzi scheme.
But not everyone sees him as a victim. The New York attorney general, Andrew Cuomo, has issued subpoenas in an effort to determine whether Merkin had defrauded universities and charities when he invested their money with Madoff, a person with knowledge of the case said Thursday.
Cuomo’s office is seeking information from Merkin, the three investment funds that he operated and 15 nonprofit institutions that gave him money to manage. Many of the institutions are now suing Merkin, claiming that they lost millions of dollars when he had invested money with Madoff without telling them.
Daily Freeman – Bard College said on Thursday that it lost about $3 million in investments tied to disgraced Wall Street financier Bernard Madoff.
Bard spokesman Mark Primoff said the losses came in the Northern Dutchess school’s $270 million endowment fund.
Primoff said the college invested in the Ariel Fund run by J. Ezra Merkin, who was a governor of Bard’s Levy Economics Institute until his recent resignation. Primoff said Merkin never told the board he was investing the money with Madoff.
Boston Globe – A judge extended an order on Tuesday barring hedge fund founder Ezra Merkin from shutting down funds that had invested with accused swindler Bernard Madoff or withdrawing money from them.
New York State Supreme Court Justice Richard Lowe issued the extension in a lawsuit brought on December 23 by New York University, which says it lost $24 million when funds run by Merkin invested money with Madoff without its consent.
Another judge issued the initial order on December 24 to stop Merkin from liquidating Ariel Fund Ltd, named in the lawsuit by the university along with Merkin and his Gabriel Capital Corp.
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
