|
Cuomo Sues Over Madoff Investments
The New York Times
April 7, 2009
J. Ezra Merkin, a prominent New York financier and philanthropist, was never the savvy investor he seemed to be - even before he steered more than $2 billion of his clients' money into Bernard L. Madoff's Ponzi scheme, according to a civil lawsuit filed on Monday.
The complaint, filed by the New York attorney general, Andrew M. Cuomo, accused Mr. Merkin of lying to clients about Mr. Madoff's dominant role in his hedge fund and improperly collecting more than $470 million in fees - fees that dwarfed his own personal losses in the Madoff fraud - for simply handing his clients' money to Mr. Madoff.
The complaint did not accuse Mr. Merkin of knowing about Mr. Madoff's vast fraud. But it charged that he had failed to carry out the diligent research and investigation he had promised, and in some cases had deliberately deceived clients about his investments with Mr. Madoff, beginning in 1992.
Moreover, it accused him of having misled his clients for nearly a decade before that by surreptitiously relying on another money manager to run his hedge funds - even after the manager had been jailed for insider trading.
A lawyer for Mr. Merkin, Andrew J. Levander of Dechert LLP, called the complaint "hasty and ill-conceived," and said Mr. Merkin would vigorously defend himself.
"The evidence shows that this lawsuit is without merit," Mr. Levander said, adding that investors had agreed that Mr. Merkin could use other money managers. "Mr. Merkin performed extensive due diligence on Madoff and his trading strategy," he continued. "Unfortunately, Mr. Merkin's due diligence, just like the detailed investigations performed by countless others, including regulators, was thwarted by the intricate, fraudulent scheme perpetrated by Madoff."
Additional news outlets to quote Mr. Levander's statement included Time Magazine, Financial Times, USAToday, AmLaw Litigation Daily, The Wall Street Journal, The Wall Street Journal Law Blog, The National Law Journal, Crain's New York Business, The Times (London), New York Daily News, The Philadelphia Inquirer, Los Angeles Times, The Guardian, The Boston Herald, Forbes.com, Pensions & Investments, FINAlternatives, Law360, Associated Press, Bloomberg, ABCNews.com, FoxBusiness.com, Reuters and United Press International.
|
