Funds Accuse Merkin Of Funneling Assets To Madoff

Law360, New York (September 17, 2010, 5:27 PM EDT) -- A receiver for Ariel Fund Ltd. and Gabriel Capital LP has sued the hedge funds’ former investment adviser J. Ezra Merkin, alleging he secretly funneled investors’ assets to Cerberus Capital Management LP and notorious Ponzi schemer Bernard L. Madoff.

The court-appointed receiver Bart M. Schwartz filed a complaint against Merkin and his Manhattan firm Gabriel Capital Corp. on Thursday in the Supreme Court of the State of New York, County of New York, asserting claims including fraud, gross negligence and unjust enrichment.

The hedge funds at...
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