NYU Sues Merkin Over Madoff Losses

Dec 29 2008 | 3:26am ET

The holiday season has not been very festive for J. Ezra Merkin, the GMAC Financial chairman whose hedge fund lost billions in Bernard Madoff’s alleged $50 billion Ponzi scheme. Merkin got a very unwelcome early Christmas present from New York University, which sued him, his Gabriel Capital and his Ariel Fund hedge funds on Christmas Eve.

NYU, the largest private university in the U.S., said it lost $24 million due to Merkin’s investments with Madoff. The school accused Merkin of investing with Madoff without notifying investors and of due diligence failures.

When Merkin suggested investing some of NYU’s assets with Madoff, “he as explicitly told this was not a proper investment vehicle,” NYU alleged in a statement. The school said it had $94 million invested in Ariel.

NYU’s complaint, the second filed by a New York City university against a Madoff investor, was filed in New York state court in Manhattan.

Madoff was arrested on Dec. 11 and charged with securities fraud in what could be the largest-ever Ponzi scheme.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...