Fund Manager Was Allegedly Warned About Madoff

According to court papers unsealed yesterday, hedge fund manager J. Ezra Merkin was apparently warned that Bernard Madoff's investments were shady back in the 1990s. Merkin, currently accused of funneling $2.4 billion into Madoff's fund, is being sued by NYU—which lost $24 million of its endowment through Merkin's fund. Fox Business, which filed a motion to have the documents unsealed, reports that Merkin employee Victor Teicher, a former financial analyst convicted for insider trading, told Merkin that Madoff's fund didn't "smell right" and "were inconsistent with what could possibly take place in reality." Teicher also said in his deposition that Merkin's accountant said Madoff's work "looked like a fraud." When news of Madoff's fraud this past December surfaced, Teicher sent Merkin an e-mail: "The Madoff news is hilarious; hope you negotiate out of this mess as well as possible; I'm yours to help in any way I can; unfortunately, you've paid a big price for a lesson on the cost of being greedy," and followed up with another, "I guess you did such a good job in fooling a lot of people that you ultimately fooled yourself."