New York University sues fund boss over Madoff

Hedge fund executive Ezra Merkin has been sued again for entrusting investments with confessed swindler Bernard Madoff, this time by New York University, which said it lost about €17 million.

The lawsuit in New York State Supreme Court is among a series against Mr Merkin and other funds during the past week as investors seek to recover losses from the purported €35.5 billion Madoff scandal that would be Wall Street's biggest fraud.

A judge issued a temporary order barring Mr Merkin from liquidating Ariel Fund Ltd, named in the lawsuit by New York University, which calls itself the largest private university in the US.

The order, which expires on January 6, will have no impact on plans announced December 18 to wind down the Ariel fund, Mr Merkin's attorney Andrew Levander said in a statement. He said the investment manager would not receive fees and attorneys had promised to preserve documents.