Hedge Fund, Founder Cleared In Madoff Feeder Fund Suit

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. 

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    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…