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

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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

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