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Omaha Steve

(99,660 posts) Sun Jun 24, 2012, 08:03 PM Jun 2012

Hedge fund manager to pay $405M to Madoff victims

Source: AP-Excite

By MICHAEL GORMLEY

ALBANY, N.Y. (AP) - A settlement announced Sunday will bring $405 million to victims of Bernard Madoff's historic investment scam, the state attorney general said.

The clients of hedge fund manager J. Ezra Merkin will receive $405 million, and New York state will get $5 million to cover the cost of the settlement worked out by Attorney General Eric Schneiderman. The victims include New York Law School, Bard College, Harlem Children's Zone, Homes for the Homeless and the Metropolitan Council on Jewish Poverty.

Schneiderman called the agreement "a victory for justice and accountability."

"Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees," Schneiderman said. "By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars."

FULL story at link.

Read more: http://apnews.excite.com/article/20120624/D9VJNSLO3.html

7 replies

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Highlight:

Hedge fund manager to pay $405M to Madoff victims (Original Post) Omaha Steve Jun 2012 OP

40 cents on the dollar Demeter Jun 2012 #1

"The settlement, however, will almost certainly face a legal challenge" PoliticAverse Jun 2012 #2

Yeah... high density Jun 2012 #3

Madoff was a greedy fool Orrex Jun 2012 #4

I have a very hard time feeling sorry for some of Madoff's victims jmowreader Jun 2012 #5

Honestly, the biggest suckers are the ones who think they know money. aquart Jun 2012 #6

Yeah, there was definitely an air of "No questions asked" willful ignorance Blue_Tires Jun 2012 #7

Demeter

(85,373 posts)

1. 40 cents on the dollar

Reply to Omaha Steve (Original post)

Sun Jun 24, 2012, 08:22 PM

Jun 2012

better than nothing, but not by much.

PoliticAverse

(26,366 posts)

2. "The settlement, however, will almost certainly face a legal challenge"

Reply to Omaha Steve (Original post)

Sun Jun 24, 2012, 09:56 PM

Jun 2012

The settlement, however, will almost certainly face a legal challenge from Irving H. Picard, the bankruptcy court trustee who has a lawsuit pending against Mr. Merkin as part of his effort to collect money to compensate all eligible Madoff victims.

“To the extent any third-party settlement seeks to divert funds” sought by the trustee, “we will have to consider taking appropriate steps,” said Amanda Remus, a spokeswoman for Mr. Picard and his law firm, Baker Hostetler.

From the longer, NY Times version of the story: http://www.nytimes.com/2012/06/25/business/hedge-fund-manager-merkin-to-pay-405-million-in-madoff-settlement.html

high density

(13,397 posts)

3. Yeah...

Reply to PoliticAverse (Reply #2)

Sun Jun 24, 2012, 10:58 PM

Jun 2012

That case accused Mr. Merkin of deceiving his clients by collecting hundreds of millions of dollars in management fees when, in fact, he was simply handing money over to Mr. Madoff, not managing it himself.

This is fairly common... I was not aware it was illegal to simply take money from people and act as a pass-through without providing any value? Most "investment" firms operate in this manner.

Orrex

(63,216 posts)

4. Madoff was a greedy fool

Reply to Omaha Steve (Original post)

Sun Jun 24, 2012, 11:32 PM

Jun 2012

If he'd stolen from poor people, it would have taken longer to amass the same sum, but no one would have batted an eye about it.

But steal from the rich? No expense will be spared to prosecute to the fullest extent of the law!

jmowreader

(50,560 posts)

5. I have a very hard time feeling sorry for some of Madoff's victims

Reply to Omaha Steve (Original post)

Mon Jun 25, 2012, 12:53 AM

Jun 2012

Read this:

http://www.slideshare.net/hblodget/markopolos-madoff-complaint-presentation?from=embed

specifically, the second to last page where the Fairfield Sentry prospectus is. Madoff was promoting a setup that, if it was legal, was able to produce very conservative mutual fund returns, but he was claiming to be able to return 12 percent.

Pensioners and others who entrusted their money to managers without knowing what the manager is buying need to be made whole. They are the innocent victims of Bernie Madoff. But the people who are supposed to know how to read a prospectus and determine if the offeror is full of shit, and put their money with Madoff anyway, need to be treated the same as any other gambling loser.

aquart

(69,014 posts)

6. Honestly, the biggest suckers are the ones who think they know money.

Reply to jmowreader (Reply #5)

Mon Jun 25, 2012, 01:32 PM

Jun 2012

No one easier to con than a CFO.

Blue_Tires

(55,445 posts)

7. Yeah, there was definitely an air of "No questions asked" willful ignorance

Reply to jmowreader (Reply #5)

Mon Jun 25, 2012, 01:53 PM

Jun 2012

as long a people got their 12 percent

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