Cuomo Sues Hedge Fund Chief for Bets Placed with Madoff

J. Ezra Merkin, head of Gabriel Capital Corp., has been sued by New York Attorney General Andrew Cuomo, after it was discovered he had placed investor’s money into funds managed by Bernard Madoff without their knowledge or consent.

Cuomo alleges that the former GMAC Financing Chairman allocated about $2.4 billion worth of client capital to the man who bilked $50 billion out of investors through an elaborate Ponzi scheme.