Pressure mounts on GMAC to oust Merkin over Madoff scheme

Last week Edwin Black asked on his news site The Cutting Edge why it was that the Fed was giving GMAC $5 billion in bailout money when one of its key players was also a key player in the Madoff sceme.

J Ezra Merkin, the chairman of the General Motors-Cerberus Capital Management, invested the entirety of the assets of his Ascot Partners hedge fund in Madoff’s Ponzi scheme, losing all of it — including money belonging to a number of charities and nonprofits on whose boards he sits.

Now, according to the Times, there is pressure on GMAC to oust Merkin.

“Clearly this is a critical time for GMAC to be able to focus on the nuts and bolts of its business and it certainly needs a leader that’s capable,” Joshua Rosner, principal of the financial consulting firm Graham-Fisher, told the newspaper.

There may not be a lot of love lost for Merkin personally. Even around the hallways of the storied Manhattan co-op building where he lives, "740 Park," he was known as an intimidator, according to Bloomberg News:

“Ezra Merkin was a figure of some mystery, even to people in and around the building where he lived,” Gross said in an interview.

His no-nonsense demeanor impressed the co-op board, though, and members were so intimidated they asked few questions before he moved in, Gross said.

Merkin was equally brusque with executives of a New York charity he asked to invest with one of his funds, said Laura Goldman, who runs money management firm LSG Capital in Tel Aviv. After arriving more than an hour late to a meeting in 2000, he became impatient when asked for details, Goldman recalled. The charity, which she served as an informal adviser and wouldn’t name, decided against giving him funds.

“This Merkin had sway over people like crazy. They were grown men and they barely got out of the meeting without signing over their lives,” Goldman said. “He’s very arrogant, and when you ask questions he makes it like, ‘Why are you asking me a question?’”

Merkin has had some of his assets frozen as the result of a lawsuit New York Univeristy brought against him after he lost $24 million of their money in the Madoff scheme, according to Reuters.

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