Reader IL sends along this arbitration award: $1.8 million against a Madoff feeder fund. Not Walter’s and his Fairfield Greenwich Group, but same cause of action, same facts. The old homestead on Round Hill Road draws closer to the auction block.
May 17 (Bloomberg) — An investor in J. Ezra Merkin’s Ascot Partners LP, a feeder fund for Ponzi schemer Bernard Madoff, was awarded $1.75 million by arbitrators who found Merkin intentionally breached his fiduciary duty by not disclosing Madoff’s role in the fund, according to a court filing.
Merkin also was negligent in performing due diligence on Madoff, a majority of an arbitration panel found, according to a petition filed today in New York state court. Investor Noel Wiederhorn, who put $1.46 million into Ascot Partners in 2003 and 2004, is seeking a judgment confirming the award, which was for the amount he invested plus interest.
Wiederhorn, a Wycoff, New Jersey, pediatrician, also asked that the sealed record of the arbitration case be made public.
“These findings could have significance in later litigation and arbitrations against Mr. Merkin as well as against numerous other Madoff feeder-fund managers,” Weiderhorn’s attorney, David Bamberger, wrote in asking for the record to be unsealed.
The evidence showed “major contradictions and ambiguities” in transaction confirmations, which should have caused Merkin to question the Madoff trades, according to his filing. The evidence in the hearing also established the “extreme improbability” of the transactions Madoff reported in the over-the-counter options market, the papers said.