Madoff Feeder Merkin Loses Arbitration, Ordered To Pay $12.7M

Sep 8 2010 | 9:39am ET

A pair of investors was awarded nearly $13 million by arbitrators in their case against Bernard Madoff feeder fund mogul J. Ezra Merkin.

Rosewood, N.J.-based Sandalwood Debt Funds A and B had accused Merkin, who ran three Madoff feeder funds, of common-law fraud, breach of fiduciary duty and negligent misrepresentation. The arbitration panel, which held six days of hearings in May, did not explain its decision to grant the Sandalwood funds the award.

Sandalwood Fund A was awarded $2.1 million and Fund B $10.5 million. Merkin—the sole respondent to the claim—was also ordered to pay $112,000 in fees. Sandalwood has asked a New York state judge to confirm the arbitrators’ decision.

The Sandalwood funds invested in Merkin’s Gabriel Capital Corp. Merkin has also been sued by New York Attorney General Andrew Cuomo and the court-appointed receiver in the Madoff case, Irving Picard. Cuomo accuses Merkin of investing much of his funds’ assets with Madoff without informing clients, claiming he reaped nearly $500 million in fees under the arrangement.

Madoff himself is serving a 150-year term for running the $65 billion, multi-decade Ponzi scheme.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR