NY Law School sues investment company for losses

December 16, 2008 7:52:05 PM PST
The New York Law School sued an investment partnership managed by the chairman of GMAC Financial Services Tuesday, blaming it for losses run up by Wall Street money manager Bernard Madoff. The lawsuit filed Tuesday in U.S. District Court in Manhattan blamed Ascot Partners L.P., J. Ezra Merkin and Ascot's independent auditor for failing to spot corruption.

Merkin is the chairman of GMAC Financial Services, the financing subsidiary of General Motors Corp.

Andrew Levander, a lawyer for Merkin, said: "Mr. Merkin and his family are personally among the largest victims of the massive crime confessed by Bernard L. Madoff. Like the other victims and the entire financial community, Mr. Merkin is shocked by these events. He intends to defend this lawsuit vigorously while seeking redress for himself and his investors from whomever perpetrated this fraud."

A spokesman for Ascot did not immediately return a telephone message.

New York Law School said it invested $3 million with Ascot in 2006. It said the investment is now worthless due to the "wrongful conduct" of the defendants.

Madoff was charged with securities fraud last week after authorities say he told his family his investment strategy was a giant Ponzi scheme that lost $50 billion.

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