Investors of a hedge fund run by J. Ezra Merkin are set to receive a huge financial compensation package after the state attorney general ruled in their favor.
The Court ruled that as a result of Merkin’s actions, investors may seek to claim more than 40% of their losses back, but with a $5 million cap. Those who lost more may have their claims assessed on an individual basis.
The institutions that will benefit from the decision include the New York Law School, Bard College, Harlem Children’s Zone, the Metropolitan Council on Jewish Poverty and a raft of other charitable institutions.
The attorney general’s office have declared that the exact terms of the settlement are likely to be released in the next few days.
Responding to the court’s ruling, Attorney General Eric Schneiderman said that the settlement was a “victory for justice and accountability.” However, he stressed that he would not be drawn into speculation surrounding other settlement cases regarding the Madoff scheme.
Many of Madoff’s other contributors still find themselves out of pocket from Madoff’s Ponzi operation. Given that the $65 billion that he had claimed to have at his disposal when the news broke in November 2008 was realistically just a few hundred million dollars, repayments have had to come from secondary investors.
J. Ezra Merkin was one such investor, and the plaintiffs’ testimony claimed that Merkin had been made aware of numerous suspicious people with regard to Madoff’s financial operations.
Merkin concealed Madoff’s role in his funds’ performance through misleading quarterly reports, among other documents. In total, he invested more than $2 billion into Madoff’s infamous Ponzi operation.