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.

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Tags: ascot, ezra, financier, goodwin procter, justice richard, lowe, madoff, merkin, new-york-attorney-general, partner david, state of new york, york-attorney

New York (HedgeCo.Net) – Two high-ranking men who worked in the New York State comptroller’s office were arrested yesterday after it was discovered they took millions of dollars in kickbacks from private equity and hedge funds, said Attorney General Andrew Cuomo.

David Loglisci, who was the top investment officer of the state’s $122 billion pension fund, along with Henry Morris, who fund-raised for former comptroller Alan Hevesi, were nailed in a 123-count indictment, which included charges of money laundering, securities fraud and bribery.

It was discovered that over 20 transactions made by the pension fund involved kickbacks, with five of those coming from the renowned private equity fund The Carlyle Group. 

Morris, who was released after posting a $1 million cash bail, allegedly received $13 million from The Carlyle Group, from investments that totaled $730 million.

“Morris used the fund as his own piggy bank and took approximately $30 million in fees for himself and his business partners on investments which Morris himself had a role in approving,” Cuomo said.

Lawyers for both men contend their clients are innocent, saying that all of the transactions benefited the pension fund and were agreed upon by outside financial institutions.  The Carlyle Group has stated they have “fully cooperated with the New York Attorney General’s Office and is not a target of the investigation.”

If convicted, both men could face a life sentence in prison.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: accredited-investors, alan hevesi, attorney-general-andrew-cuomo, carlyle-group, count indictment, david loglisci, financial-institutions, henry morris, investment officer, kickbacks, new york state comptroller, new-york-attorney-general, pension-fund, prison julie, private equity fund, securities fraud, target, york state comptroller, york-attorney

Editor & Publisher – Polar Securities, a Toronto-based hedge fund, disclosed Tuesday that it has purchased a big stake in troubled Sun-Times Media Group (STMG).

In two filings with the U.S. Securities and Exchange Commission (SEC), Polar said it has made big purchases of the stock in recent days, and now owns 8,718,163 shares of STMG common stock, or approximately 13.3% of shares outstanding.

Among the Polar entities making the buys is South Pole Capital, which Polar’s Web site describes as a "Canadian distressed securities fund."

STMG, publisher of the Chicago Sun-Times and dozens of other Chicago-area publications, has said it is exploring strategic alternatives including the sale of all or some of the company.

STMG shares were de-listed from the New York Stock Exchange earlier this month and now trade over-the-counter on the Pink Sheet. Shares of the stock (OTC: SUTM.PK) were trading in the early afternoon at 42 cents, down 1 cent, or 2.33%, from its opening.

Polar is headed by Canadian John Paul Sabourin.

STMG Director of Investor Relations confirmed the size of the stake, but declined further comment.

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Tags: asset-value, citigroup, market-regions, new-marketplace, new-york-stock-exchange, news-press, pension-fund, portfolio-manager, significant-numbers, suggestion, york-attorney, york-stock-exchange