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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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February 17, 2009 2:04 PM ET
(Crain’s)—Ezra Merkin, the prominent New York financier who funneled billions of dollars to Bernard Madoff, was warned by a partner convicted of insider trading that Mr. Madoff’s results were too good to be true, according to an attorney in a client lawsuit against Mr. Merkin. The partner, Victor Teicher, told Mr. Merkin that “the Madoff returns smelled, that they were not probable” and that trading statements had been “altered,” said Beth Kaswan, a lawyer for New York University, which has sued Mr. Merkin, at a court hearing Tuesday. Having received the warning, Mr. Merkin contacted Mr. Madoff. “Is it true?” Mr. Merkin asked, according to Ms. Kaswan. Mr. Madoff denied anything was amiss. It isn’t clear when this exchange took place, and details of a deposition Mr. Teicher recently gave to NYU are under court seal. But the exchange suggests Mr. Merkin had been warned before Mr. Madoff was alleged in December to have orchestrated a $50 billion Ponzi scheme. Mr. Merkin, a former chairman of auto lender GMAC and major force in local philanthropic circles, invested about $2 billion with Mr. Madoff by raising cash from NYU, New York Law School and other clients. Mr. Teicher’s involvement with Mr. Merkin was first disclosed in court documents filed late last week. Mr. Merkin’s lawyer, Andrew Levander, confirmed at Tuesday’s court hearing that Mr. Teicher did help manage money for Mr. Merkin during the 1990s, when NYU and many other clients began investing with Mr. Merkin. But he denied NYU’s allegation that Mr. Teicher managed funds from a prison cell while serving a sentence for insider trading. “He was only able to make one phone call per week,” Mr. Levander said. Tuesday’s revelations are the latest in an explosive civil case pitting NYU against Mr. Merkin, once a renowned investor until the Madoff scheme came to light. NYU says it lost at least $24 million investing with Mr. Merkin and says it was unaware he was directing its money to Mr. Madoff while pocketing a hefty hedge-fund-level management fee. Mr. Merkin’s lawyers, who seek dismissal of NYU’s charges, contend investors were fully warned of all the risks and Mr. Merkin was under no obligation to disclose that he used outside money managers. NYU is asking a New York State Supreme Court judge to grant an injunction and appoint a receiver who would oversee the winding down of Mr. Merkin’s business, called Ariel Fund and no relation to similar business based in Chicago. The judge, Richard Lowe, punted on the issue Tuesday, saying he would extend a temporary restraining order granted last month but would rule on the injunction “as soon as I can.”
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