Labor & Employment Law

NY Attorney General sues J. Ezra Merkin over $2.4 billion investor losses in Madoff Ponzi Scheme

By Dobin & Jenks

"Glaring Red Flags and Returns to good to be true", should have alerted Mr. J. Ezra Merkin to the Madoff Ponzi scheme according to New York Attorney General Andrew Cuomo. He is bringing the suit against Merkin because of his actions and reckless disregard regarding unsuspecting investors losing $2.4 billion. Although his clients lost money, Merkin personally gained $470 million for his careles actions. Merkin is the general partner of Ascot and Gabriel, domestic hedge funds and has been involved with running investment funds since 1989. One would think that with all his experience and credentials, he should have known better.

In a 54-page complaint filed earlier this week, New York Attorney General Cuomo accuses Merkin of duping his customers into believing he was investing their money. He touted himself as an "investing guru" when "in reality" he was only "a master marketeer."

On a positive note, Merkin is not accused of knowing about Madoff's fraud. However, because of his experience and track record, he should have known better. In the complaint, Cuomo is stating that Merkin is guilty of "deceit, recklessness, and breaches of fiduciary duty."

Click here to read more from the Law Journal Article on N.Y. Attorney General Sues Financier Over Madoff Losses

All eyes are on this New York case, because of the implications for other Brokers. Time will tell if Merkin and others will face consequences for client losses in the Madoff Ponzi scheme.

Let's hope that Justice Prevails and that Attorney General Andrew Cuomo has sucess with his suits against Merkin.

Full post as published by The Law Planet Blog on April 07, 2009 (boomark / email).