NEW YORK — J. Ezra Merkin, a hedge-fund manager who invested billions of dollars of clients’ money with swindler Bernard Madoff, has agreed to relinquish control of his funds to court-appointed trustees.
The attorney general’s office had requested the move in connection with its civil fraud lawsuit accusing Merkin of convincing clients he was managing their money when he was actually funneling $2.4 billion to Madoff’s Ponzi scheme.
The deal, which is expected to be approved by a judge Thursday, is not a settlement in the case, the attorney general’s office said.
Lawyer Andrew Levander said in a statement the move was part of Merkin’s “continuing efforts to maximize the returns to investors” and “provide certainty and stability during the previously announced wind-down of the Ariel and Gabriel Funds.”
Those funds are to be handed over to Guidepost Partners LLC, while Merkin’s Ascot Partners fund is to be placed under the control of David Pitofsky, a litigation lawyer.
