Money manager Ezra Merkin has been hit with a new lawsuit over client money he allegedly secretly steered to Ponzi schemer Bernard Madoff, Reuters reported yesterday. Keren Matana, an Israeli charity, sued to recover $1.5 million it lost by investing in the Ascot Fund, an offshore hedge fund managed by Merkin that fed money to Madoff. The charity is also seeking $5 million in punitive damages. Merkin agreed last year to a settlement of $405 million for investors in his hedge funds whose assets went to Madoff, ending a lawsuit brought by the New York attorney general's office. In its lawsuit filed last Thursday, Keren Matana claimed it cannot collect through the settlement. Keren Matana said a Merkin lawyer, an unnamed partner at Dechert, claimed that the charity is excluded from the settlement unless Benjamin Jesselson, a former member of its executive committee, waives his right to an arbitration award against Merkin. Jesselson won a $1.5 million award over investments made by his family trusts in Madoff feeder funds.
