New York University sues fund exec over Madoff

The complaint was filed on Tuesday in New York State Supreme Court by NYU.

New York University sues fund exec over Madoff

New York hedge fund executive Ezra Merkin has been sued again for entrusting investments with confessed swindler Bernard Madoff, this time by New York University, which said it lost about $24 million.

The complaint was filed on Tuesday in New York State Supreme Court by NYU, which describes itself as the largest private university in the United States. The lawsuit is the latest in a series against Merkin and other funds during the past week as investors seek to recover losses.

Merkin's attorney Andrew Levander was not available for comment on the lawsuit, his office said. In a statement responding to a lawsuit in federal court on Dec. 16, Levander said Merkin and his family were among Madoff's biggest victims.

Madoff, a 70-year-old investment adviser and former chairman of the NASDAQ stock market, was arrested on Dec. 11 and charged with securities fraud. Authorities said Madoff confessed to running a $50 billion Ponzi scheme in which early investors were paid off with the money from new clients.

He is under house arrest in his Manhattan apartment on $10 million bail.

Merkin, who is chairman of GMAC LLC, is named in the lawsuit brought by NYU, along with his Gabriel Capital LP fund and Ariel Fund Ltd. GMAC is the finance business owned by General Motors Corp and private equity firm Cerberus Capital Management LP.

"The Funds 'feeding' money to Madoff, including Ariel, made a conscious effort to conceal Madoff's involvement from their own investors," the NYU lawsuit said. "This concealment was a requirement dictated by Madoff, which was agreed to by Merkin and other 'feeder' funds."

Merkin was sued last week in U.S. District Court in Manhattan for his management of Ascot Partners LLP, a fund he founded that lost an estimated $1.8 billion from investing money with Madoff.

On Tuesday, French executive Thierry Magon de la Villehuchet, 65, was found dead in his office in an apparent suicide, reportedly distraught over being duped by Madoff.

New York City Police Commissioner Raymond Kelly said Villehuchet had cuts on his wrists from a box cutter and pills nearby.

Villehuchet's Access International had an exposure of $1.5 billion, officials said.

The total amount of money lost in the Madoff scandal is not yet known, but it could be the largest fraud on Wall Street, duping rich people all over the world as well as charities and nonprofit organizations.

The case is New York University v. Ariel Fund Ltd 08- 08603803 in New York State Supreme Court (Manhattan).

Last Mod: 24 Aralık 2008, 23:24
Add Comment