Search By:
Products
Injury
Topic
Company
Industry
Gabriel Capital might have recklessly entrusted its investment assets to Bernie Madoff.
Investigation Source (Case #08-cv-10930)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Investments
- Scams (Including Madoff)
- Unregistered Investments
- Audit Action
- Private Placement
- Unregistered Securities
- Lead Plaintiff Not Chosen
Product or Service
- Hedge Funds
Injury Type
- Monetary Loss
Investigation Details
This is a securities fraud class action lawsuit against Gabriel Capital, its general partner Ezra Merkin, and its auditors BDO Seidman. The class consists of limited partners in Gabriel Capital.
This case arises from a massive fraudulent scheme perpetrated by Bernard L. Madoff through his investment firm, Bernard L. Madoff Investment Securities, LLC ("BMIS"). Gabriel Capital invested 27% of its investment capital with Madoff. On December 10, 2008, Madoff informed certain senior employees at BMIS that his investment advisory business was a fraud. Madoff stated that he was 'finished,' that he had 'absolutely nothing,' that "it's all just one big lie," and that it was 'basically, a giant Ponzi scheme.' Madoff communicated to the senior employees that he had for years been paying returns to certain investors out of the principal received from other, different, investors. Madoff stated that the business was insolvent, and that it had been for years. Madoff also stated that he estimated the losses from this fraud to be approximately $50 billion. On December 11, 2008, the SEC charged Madoff and BMIS, with securities fraud for a multi-billion dollar Ponzi scheme that Madoff and others perpetrated on advisory clients of BMIS.
One of those clients was Gabriel Capital, which, unknown to plaintiff and other class members, had entrusted virtually 27% of its investment capital --- capital provided by plaintiff and the class through their purchase of limited partnership interests in Gabriel Capita--to Madoff. Gabriel Capital, simply put, should have known much better. Gabriel Capital violated federal securities laws has been decimated, as a direct result of. (a) defendant Merkin's abdication of his duties by concentrating its investment exposure in Madoff as sole third-party investment manager for all of the Partnership' s assets, to perform its audits and provide its annual audit reports in conformance with generally accepted auditing standards.
This case arises from a massive fraudulent scheme perpetrated by Bernard L. Madoff through his investment firm, Bernard L. Madoff Investment Securities, LLC ("BMIS"). Gabriel Capital invested 27% of its investment capital with Madoff. On December 10, 2008, Madoff informed certain senior employees at BMIS that his investment advisory business was a fraud. Madoff stated that he was 'finished,' that he had 'absolutely nothing,' that "it's all just one big lie," and that it was 'basically, a giant Ponzi scheme.' Madoff communicated to the senior employees that he had for years been paying returns to certain investors out of the principal received from other, different, investors. Madoff stated that the business was insolvent, and that it had been for years. Madoff also stated that he estimated the losses from this fraud to be approximately $50 billion. On December 11, 2008, the SEC charged Madoff and BMIS, with securities fraud for a multi-billion dollar Ponzi scheme that Madoff and others perpetrated on advisory clients of BMIS.
One of those clients was Gabriel Capital, which, unknown to plaintiff and other class members, had entrusted virtually 27% of its investment capital --- capital provided by plaintiff and the class through their purchase of limited partnership interests in Gabriel Capita--to Madoff. Gabriel Capital, simply put, should have known much better. Gabriel Capital violated federal securities laws has been decimated, as a direct result of. (a) defendant Merkin's abdication of his duties by concentrating its investment exposure in Madoff as sole third-party investment manager for all of the Partnership' s assets, to perform its audits and provide its annual audit reports in conformance with generally accepted auditing standards.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Gabriel Capital, LLC | Gabriel Capital, LLC is a registered investment advisory firm. |
| BDO Seidman, LLP | BDO Seidman, LLP is a large accounting firm, which provides assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. |