Wednesday, 24 August 2016
Last updated 1 hour ago
Jul 29 2014 | 8:41am ET
A hedge fund founded by a former top Merrill Lynch executive isn’t on the hook for losses suffered by two clients in the Bernard Madoff scandal.
A federal jury in Maine last week cleared Spring Mountain Capital and its founder, John Steffens, a former Merrill Lynch vice chairman. Steffens and his hedge fund were accused of encouraging Daniel Goldenson and his wife to invest with Madoff feeder fund manager J. Ezra Merkin, an investment that cost the couple up to $4.8 million.
It took the jury just three hours to clear Spring Mountain, which itself lost about $40 million it had invested with Merkin.
The Goldensons sued Spring Mountain four years ago, accusing it of having “simply funneled investors’ money to Madoff Investment Securities” without telling clients about Madoff’s role in the Merkin fund.