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Wednesday, January 7, 2009

Bernie Burns NYU For $94 Million

The New York Post by DAREH GREGORIAN, BRUCE GOLDING and MURRAY WEISS - January 7, 2009

New York University lost as much as $94 million when a hotshot money manager, against the school's wishes, invested the cash with swindler Bernie Madoff, its lawyers told a judge yesterday. Ariel Fund Ltd., run by financier and GMAC Chairman Ezra Merkin, "engaged in purposeful deceit" by putting the funds with Madoff, NYU lawyer Beth Kaswan complained.

In response, Manhattan Supreme Court Justice Richard Lowe continued a restraining order against the once-mighty Ariel Fund. In court papers, the school said it is already out $24 million because of Merkin's secret dealings with Madoff. Kaswan said the university would be in danger of losing its entire $94 million investment without the judge's help. "You had a pattern of grossly negligent conduct by Mr. Merkin," and if he's allowed to continue running the Ariel Fund, "NYU won't see a dollar of its investment." Merkin lawyer Andrew Levander, denying any wrongdoing, said his client should be allowed to wind down the fund and repay all investors what he can. The lawyer said Merkin, like NYU, is a victim of Madoff, the hedge-fund trader who perpetrated a $50 billion Ponzi scheme. "It's a tragedy of epic proportions," Levander said. "[Merkin's] lost tens and tens of millions of dollars." School officials, however, claim they specifically asked Merkin in October not to invest their money with Madoff, citing a lack of oversight for Madoff's investments, court papers say.

The school discovered its wishes hadn't been heeded in a Dec. 12 letter, when Merkin told investors that Gabriel Capital, a $1.5 billion hedge fund, and Ariel would both liquidate because they had been battered by losses on Madoff investments. Levander told the judge his client was under no obligation to inform NYU about how its investments were handled. Meanwhile, prosecutors last night delivered a letter to a Manhattan federal judge bolstering their argument that he should promptly revoke Madoff's $10 million bail and lock him up pending trial. Lawyers revealed Monday that Madoff two weeks ago mailed five packages containing more than $1 million in watches, cufflinks, mittens and other items to his two sons, brother and friends. Prosecutors say the mailing violated an injunction barring Madoff from dissipating assets, which could be subject to seizure by the government at some point, and warned there was a risk he would trying to hide other assets while out on bail. Sources said Madoff mailed eight to 10 gold antique watches, among them Patek Philippe and Vacheron Constantin timepieces, each worth between $30,000 and $70,000. With Post Wire Services


Anonymous said...

No surprise that J. Ezra Merkin is an attorney is good standing in New York.

Just another example of why the federal authorities should just round up everybody associated with the legal and judicial business in NY and haul their butts off to jail.

That is, if they can find one that's big enough.

Anonymous said...

Two Thumbs Up to Frank Brady and Integrity in the Courts from the Hudson Valley Region for the Recent Detailed In Depth Article discussing Massive Attorney Conflicts in the Madoff Probe and the Detailed Information on the history of the Bank of New York and following the Money Trail!

This Detailed Analysis brings Renewed HOPE that the career professionals at Justice will continue the Clean Up of Wall Street but just as important is the Clean Up of the NY Justice System including ALL 4 Appellate Divisions and Discipline Committees and the CJC and more!

Go Gizella, Anderson and Related Cases and more!

Anonymous said...

The trustees are responsible for the investments, It is time that the trustees take their legal responsibility for their lapses. These trustees have plenty of personal assets to cover their negligence.

Anonymous said...

with all thesmart people at NYU how did this flimflam scamper do it? Where was the big shot Bert Newborn who has his nose into everything?

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