Mort Zuckerman on the Madoff Scandal

As if the housing crisis, liquidity freeze, deepening recession, and prospect of deflation weren't enough, now we have the Madoff Affair rocking Wall Street and investors everywhere. While no indictments have been handed down yet, prosecutors allege that Bernard Madoff, founder of Bernard L. Madoff Investment Securities, has orchestrated a long-running Ponzi scheme that duped investors—among them hedge funds, charities, and the rich and famous—out of billions. One big name allegedly taken to the cleaners was Mort Zuckerman, a principal of Boston Properties, proprietor of the and , a political commentator, and a philanthropist who was on 's recent list of most generous givers. Zuckerman says he lost none of his personal wealth, but a chunk of the assets in a charity he controlled was invested with Ascot Partners, a hedge fund run by J. Ezra Merkin, managing partner of Gabriel Capital Group and chairman of GMAC Financial Services. Zuckerman said he got a letter from Ascot last week saying almost all its assets had been invested with Madoff and were presumed lost. At least one suit against Ascot has already been filed in federal court in Manhattan, according to news reports, and when I talked with Zuckerman on Dec. 16, he said he, too, would be going after Ascot. In an e-mail, Merkin's lawyer, Andrew Levander of the Dechert law firm, said: "The offering Memorandum for Ascot expressly named Madoff Securities as a prime broker for the fund in several places and accurately described Ascot's trading strategy. Moreover, Mr. Merkin regularly consulted with Mr. Madoff about the trades he was supposedly executing for Ascot, and Mr. Merkin's management team contemporaneously reviewed the trading tickets provided by Madoff Securities. To our horror, it now appears that those discussions and those trade tickets were a sham."

What's the impact of the Madoff scandal on your charitable trust?