Ex-Merrill CEOs, Execs. Lose In Madoff-Linked Hedge Fund

Feb 2 2009 | 1:53am ET

Two former Merrill Lynch CEOs and another one-time top executive said last week that they lost money very indirectedly invested with accused Ponzi schemer Bernard Madoff.

Daniel Tully, who served as CEO for four years in the mid-1990s, and Barry Friedberg, who led the firm’s investment bank until his retirement in 2002, lost some of their ample fortunes in a hedge fund founded by John Steffens, another former Merrill college. Steffens’ Spring Mountain Capital had invested some $40 million in three feeder funds run by J. Ezra Merkin that had almost all of their assets invested with Bernard L. Madoff Investment Securities.

According to Bloomberg News, both Tully and Friedberg described the extent of their losses as “very little.”

Tully’s successor as CEO, David Komansky, also invested with Spring Mountain, according to The Wall Street Journal. Steffens had been widely tipped to take the top job when Tully retired, but the post instead went to Komansky. Steffens, who headed the firm’s brokerage unit. left Merrill Lynch in 2001.

Spring Mountain manages about $2 billion, $800 million of which is in its Madoff-scarred funds of hedge funds—although the Journal notes that one of its funds, Spring Mountain Capital Partners QP I, could have had as much as 7% of its assets invested with the Merkin funds. The firm acknowledged its Madoff exposure in December, shortly after news of the scandal broke.


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.