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.

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West Palm Beach (HedgeCo.net) – The Manager of the K Squared Funds, a New York-based group of hedge funds, was named as a defendant in a lawsuit filed by his ex-partner. The suit brings claims for fraud, breach of contract, unjust enrichment, and bad faith dealing in connection with the hedge funds.

Filed in the Commercial Division of New York Supreme Court, New York County, the complaint details how Kane and the hedge funds benefited by false attribution of income to Kane’s ex-partner by profiting from the interest income while saddling the ex-partner with the tax bill, and how Kane failed to comply with his contractual obligations, keeping his ex-partner in the dark about the value of the Funds.

The defendant, Chris Kane of New Canaan, Connecticut, parted ways with his partner in 2006.

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