Judge Dismisses Merkin Dismissal Bid

Feb 18 2010 | 2:12am ET

J. Ezra Merkin will have his day in court, whether he wants it or not.

Merkin, the former GMAC Financial chairman and Bernard Madoff feeder fund manager, lost his bid to have a lawsuit filed by New York State Attorney General Andrew Cuomo tossed. Judge Richard Lowe of New York State Supreme Court rejected Merkin’s allegations that Cuomo’s lawsuit did not meet legal standards.

Cuomo accused Merkin of “recklessly” investing billions of his clients’ money with Madoff, who pleaded guilty last year to running a $65 billion Ponzi scheme. The lawsuit alleges that Merkin poured almost all of the assets of his Ascot Partners and Ascot Fund, as well as about one-third of the assets of his Gabriel Capital Corp.—also named as a defendant in the lawsuit—without notifying most of his investors.

Cuomo called Merkin “a glorified mailbox.”

Merkin’s lawyers showed Lowe e-mails from “about 10 investors” indicating that they knew he was investing their money with Madoff, but the judge ruled that those e-mails “fail to demonstrate that dismissal is warranted at this early state of this action.”


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...