*UPDATE: Victor Teicher, the Merkin advisor described in the NYT story quoted below, disputes the NYT’s characterization of these events. Full statement below.
EARLIER: Hard to know where to start:
NYT: One of the top advisers to the money manager J. Ezra Merkin, who invested $2 billion of his clients’ money with Bernard L. Madoff, is a convicted felon who worked for Mr. Merkin while still in federal prison, according to recently filed court documents.
The adviser, Victor Teicher, who had been convicted of federal securities fraud and was barred from the securities industry, advised Mr. Merkin on the management of his Ariel Fund Ltd. through phone calls made to Mr. Merkin’s Park Avenue office from a New Jersey prison.
That’s good. But here’s the kicker:
There was, however, one piece of Mr. Teicher’s investment advice that Mr. Merkin did not follow: Mr. Teicher warned Mr. Merkin that Mr. Madoff’s trading results were impossible to achieve.
You have to love the fact that Merkin was allegedly calling a man in prison for advice only to ignore the best advice he gave.
All this is coming to light as NYU sues Merkin for vaporizing $24 million of NYU’s money. The above version of the story is NYU’s.
UPDATE: Victor Teicher disputes this account:
In response to the New York Times article of February 14, 2009, my attorneys have sent the following to the New York Times:
“We are counsel to Victor Teicher, who is referenced in a misleading and false way in a February 14, 2009 article about Ezra Merkin’s lawsuit with NYU. We write to demand an immediate retraction of statements in that article which suggest directly or indirectly that Mr. Teicher acted in violation of a bar by the Securities and Exchange Commission when he provided services to certain of Mr. Merkin’s funds in certain periods in the 1990’s into the beginning of 2000.
Those statements are false because Mr. Teicher was permitted, pursuant to an express agreement with the SEC, to be associated with unregistered investment advisors such as Mr. Merkin, until a final, unappealable order was issued by the Courts that the SEC had jurisdiction over unregistered investment advisors. After that final ruling was issued in the beginning of 2000, Mr. Teicher observed his agreement with the SEC to the letter and promptly stopped working for Mr. Merkin’s funds. Your statement that he continued to be associated with those funds until 2001 is also false.
Having falsely suggested that Mr. Teicher’s association with Mr. Merkin’s funds was illegal, your article goes on to suggest that Mr. Teicher’s 2007 and 2008 applications to modify his industry bar falsely claimed that he had complied with the securities laws and did not disclose his supposed illegal association with Mr. Merkin’s funds. All of those false statements are libelous per se, and must be immediately and prominently retracted.
We note that had your reporters followed proper journalistic practices and attempted to contact Mr. Teicher or his representative prior to publication of this article, they would have learned the true facts. The failure to seek comment or clarification from Mr. Teicher is inexcusable and Mr. Teicher will pursue all available remedies.”