In the letter he just happened to mention that he might have accidentally given a very small amount of the investor’s money to Bernard L. Madoff. Not very much. Just almost the entire $1.8 billion.
Merkin’s investors may also have noticed that Madoff was arrested last week for losing all of his investors’ money in a massive Ponzi scheme.
Now Merkin’s investors are a tad upset, especially since Merkin had provided investors with a detailed investment plan. And that plan somehow failed to mention “or I’ll just give all your cash to Madoff.”
The Ascot Partners investors are now planning to sue Merkin back to the Stone Age, although the agreement they signed with Merkin specifies that he has the right to give money to “third party managers.” But investors are asking why they bothered to pay Merkin anything, if all he was going to do was give the money to Madoff.
Clients also claim they had conversations with Merkin about Madoff, at no point during which did Merkin mention “oh yeah, I gave that guy all your money.”
New York’s Yeshiva University invested $100 million in the fund, and now the Jewish community is out for Merkin’s head. If only religious Jews like Merkin had some sort of book that would school them in ethical behavior.
Speculation is rampant on what Merkin was doing all day while supposedly managing his clients’ money. I suggest that maybe he was soloing Zul’Gurub with his level 80 Death Knight.
Via NYT and The Jewish Week.