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Denver Post – Topps Co. will feature Charlie Ponzi and Bernie Madoff in a series of trading cards due out on June, covering the "world’s biggest hoaxes, hoodwinks and bamboozles."
Unfortunately, scores of lesser Ponzi schemers will never stack in this deck.
Like Wayne Puff.
I don’t know who gives millions of dollars to a guy named Puff. But last week this 61-year-old founder of a New Jersey real estate company pleaded guilty to bilking more than $80 million from hundreds of people.
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.
New York (HedgeCo.Net) – Stephen Feinberg’s Cerberus Capital Management has followed in the footsteps of many faltering hedge funds this year, limiting client redemptions in one of its funds after investors moved to withdrawal 16.5 percent of their capital, according to a recent letter to investors.
The Cerberus Partners Fund is down 16 percent this year through the end of November. Cerberus said they would honor about 20 percent of the redemption requests, while others might have to wait a year to pull out their cash. However, they are planning on waiving 60 percent of the incentive fee for a year after the losses are made up for any money that is still in the fund as of December 31.
“This is a very hard decision for us, and the realization that taking these steps is now necessary is deeply disappointing,” said the letter.
Cerberus agreed to give its stake in Chrysler to creditors and employees as per an agreement with Uncle Sam for the auto manufacturer to receive a loan. Its ties with the U.S. auto industry, however, don’t end there. They also invest in GMAC, the financing sector of GMC. Both GMC and Chrysler have taken a beating this year, more so than any other American car maker, prompting them to seek a $15 billion bailout from the government.
Cerberus isn’t the only hedge fund choosing to halt redemptions this year. Around 80 reputable firms including Harbinger, Citadel, RAB and Blue Mountain have chosen to freeze funds in an effort to stave off withdrawals fueled by fear in a sour economy.
Fortunately, Cerberus has confirmed that none of their funds are directly or indirectly invested with Bernard Madoff, the Ponzi-schemer who is responsible for bilking $50 billion out of investors.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Reuters – Swiss private bank Union Bancaire Privee (UBP) may pull client money out of hedge funds unless they set up independent administrators, the Financial Times said on Wednesday.
The Geneva-based bank, one of the world’s largest investors in hedge funds, declined to comment on the report, which cited an internal memo to instruct managers.
Investors have blamed the absence of independent administrators as a key factor in Bernard Madoff’s success in setting up an alleged fraudulent Ponzi or pyramid scheme. Madoff was arrested earlier this month on accusations of a $50 billion fraud.
