Today we learn that New York’s Yeshiva University lost about $110 million in investments made with the gonif Madoff; and a second trustee whose money-management firm had ties with Madoff’s securities business has stepped down.
Madoff was arrested last week and accused of defrauding investors of $50-billion in what has been called “a giant Ponzi scheme.” He resigned as a member of Yeshiva’s Board of Trustees and chairman of its business school after his arrest.
Most of Yeshiva’s losses were invested through hedge funds controlled by that nuchshlepper, J. Ezra Merkin, who was a Yeshiva trustee and chairman of the university’s investment committee. Merkin resigned from both positions on Friday.
Merkin is chair of GMAC Financial Services, but the investment losses are related to a money-management firm that he also runs, Gabriel Partners. In a letter to clients last week, Merkin revealed that one of Gabriel’s funds, Ascot Partners, had invested all of its assets with Madoff and had suffered “major losses.”
The New York Law School, instead of just kvetching, sued Merkin and Ascot Partners today, along with the fund’s auditor. The school said the $3 million it had invested with the fund was now worthless because of the “wrongful conduct” of the defendants.
A lawyer for Merkin said that Merkin himself was a victim “of the massive crime confessed by Bernard L. Madoff” and that he would vigorously defend the lawsuit.