New York Law School filed an investor lawsuit against J. Ezra Merkin, chairman of lender GMAC Financial Services, one of his funds and its auditor on Tuesday over investments made through Bernard L. Madoff Investment Securities LLC, whose founder has been charged in a massive Ponzi scheme.YU:
The lawsuit, filed in U.S. District Court in Manhattan, alleges recklessness, gross negligence and breach of fiduciary duties by Merkin, who also heads money- management firm Gabriel Partners; the fund, Ascot Partners LP; and its auditor, BDO Seidman LLP.
The complaint alleges Merkin abdicated his responsibilities and duties as Ascot's general partner and manager in entrusting substantially all of its assets - $1.8 billion - to the Madoff firm and that Seidman failed to recognize "red flags" at the Madoff firm.
"As a proximate result of Merkin's bad faith breach of fiduciary duty, plaintiff and other class members have sustained damages, suffered mental and emotional distress and have lost most, if not all, of their respective investments in an amount yet to be determined," the lawsuit said. (Dow Jones via CNN)
“The university has retained legal counsel, but it is way too early to say what legal actions are being considered as far as any talk of suing Merkin.” (Bloomberg)Well YU, just join the NY Law investor lawsuit and don't bother your dilatory selves with "any talk."
Merkin will seek redress from, "Whoever perpetrated" - well in large part that would be for Merkin to sue himself for gathering up $1.8 billion to siphon through to Madoff for his Ponzi scheme, wouldn't it?
The lawsuit, filed in U.S. District Court in Manhattan, alleges recklessness, gross negligence and breach of fiduciary duties by Merkin, the fund, Ascot Partners and its auditor, BDO Seidman LLP.
Merkin’s lawyer, Andrew J. Levander, offered this response:
“Mr. Merkin and his family are personally among the largest victims of the massive fraud confessed by Bernard Madoff. Like the other victims and the entire financial community, Mr. Merkin is shocked by these events. He intends to defend the lawsuit vigorously while seeking redress for himself and his investors from whoever perpetrated this fraud.” [Link]