Two contemporaries rushed to the defense of hedge fund manager Ezra Merkin, who is reportedly being investigated by New York Attorney General Andrew Cuomo after his investors lost billions of dollars linked to disgraced money manager Bernard Madoff. William Ackman, who manages Pershing Square Capital, and Michael Steinhardt of Steinhardt, Fine, Berkowitz & Co. both called Merkin, a partner at hedge funds Cerberus Capital, Gabriel Capital and Ascott Partners, an "honest" man at a panel discussion of Madoff Thursday night at the Yivo Institute for Jewish Research. "I've known him for 15 years," Ackman said. "I think he's an honest person, an intelligent person, an interesting person, a smart investor. People don't want to hear that because if you invested with Ascot you lost all your money." Merkin has come under fire in recent weeks, after getting sued by New York University over $24 million in losses tied to Madoff, the disgraced New York money manager accused by authorities to have been running a $50 billion Ponzi scheme. The controversy forced Merkin to resign earlier this month from his post as chairman of General Motors ( GM - Get Report) financing affiliate GMAC , of which Cerberus is a majority partner. ( Photo gallery: The Madoff Mess ) Real estate and media mogul Mort Zuckerman, chairman of Boston Properties ( BXP - Get Report) and publisher of the New York Daily News and U.S. News and World Report, was in no mood to pardon Merkin, who he called an "enabler" of Madoff. A charitable trust overseen by Zuckerman lost $30 million in investments through Ascot.
"Mr. Merkin in his dealings with me misrepresented what that particular very large fund was doing," Zuckerman said. "Our relationship is, shall we say, going to be essentially handled through lawyers." Steinhardt called Merkin "a friend" who is "undergoing the most tortuous moment in his life." "
If you read the press you come away with a feeling that he's a terrible guy and, at least from two of us up here, we truly believe that he is being wrongly described and he deserves a great deal of sympathy," Steinhardt said. While there have been several reports that Merkin is under investigation, the New York Attorney General's office has made no official statement on the matter. Calls to the attorney general's press office and to Merkin attorney Andrew Levander were not returned.