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 6^th.  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 11^th 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.

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, bernard madoff, christmas eve, esra, hedgeco, investment vehicle, january 6th, latest victim, manhattan judge, manhattan-court, merkin, new-york-university, ponzi scheme, proper due diligence, schemer, spokesman john, web of lies

New York (HedgeCo.Net) – Just days after what could prove to be the largest Wall Street sham in history, investors that were burned by Bernard Madoff are coming forward in droves.

Spanish bank Santander, along with French bank BNP Paribas both detailed their exposure to the alleged ponzi scheme on Sunday.  Santander estimated it had just over $3 billion tied up in the firm, while BNP Paribas has about $470 million at stake. 

"While BNP Paribas has no investment of its own in the hedge funds managed by Bernard Madoff Investment Services, it does have risk exposure to these funds through its trading business and collateralized lending to funds of hedge funds," BNP said in a statement.

Santander’s exposure came from a sub fund of their Optimal Fund, called Optimal Strategic US Equity, which used Madoff Securities for their investments. 

A handful of hedge funds have also come forward in the wake of the scandal.  Fairfield Greenwich Group released a statement on Friday saying they were still trying to assess their losses, but estimated they had about $7.5 billion, or half of its total assets, tied up in Madoff’s firm as of November.  Founding Partner Jeffrey Tucker said they were “shocked and appalled by this news.”

Tremont Capital Management also had a hefty amount invested with Madoff through their fund of funds.  “Needless to say, our level of anger and dismay over the apparent betrayal by Mr. Madoff and his organization of his 14-year relationship with Tremont is immeasurable,” Tremont stated in a letter to investors on Friday.

Also coming forward on Friday was Maxam Capital Management, who reported losing $280 million through Madoff-linked investments. 

Bernard Madoff, owner of Bernard L. Madoff Investment Securities and part founder the Nasdaq stock market, was arrested and charged on Thursday with orchestrating a $50 billion scam that targeted some of the most reputable hedge funds and affluent individuals in the business.  The 70-year-old allegedly ran a large ponzi-scheme where new money coming in is used to pay off existing investors, creating the false notion of peak performance and admirable returns. 

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, bank-for-international-settlements, banking-and-finance, chief-executive, commodity-pool-operators, due-diligence-service, falcon, fund-money, investment-value, libel, manhattan-court, massive-fraud, money-managers, new-evidence, rogue-trader, volatility, weather-derivatives