NYU claims $24m Madoff-related loss
New York University, the largest private university in the US by number of students, became the latest known victim of Bernard Madoff's alleged $50 billion Ponzi scheme when it sued a fund manager over $24 million in losses.
J. Ezra Merkin, his Gabriel Capital LP fund and Ariel Fund Ltd invested NYU's money with Madoff without telling investors or proper due diligence, according to a complaint filed on Wednesday in New York state court in Manhattan. NYU, which said it had $94 million invested in Ariel, alleged Merkin made all the investment and executive decisions for the fund.
When Merkin "proposed investing the university's money with Mr. Madoff without telling us he had already done so, he was explicitly told this was not a proper investment vehicle", NYU spokesman John Beckman said in a statement. Merkin didn't "exercise reasonable judgment in investing NYU's money".
