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Insurance firms, Technion among losers in Madoff investment scam By Haaretz Correspondents and News Agencies , By Sharon Shpurer and Yoram Gabison Tags: bernard L. Madoff  The huge $50 billion fraud allegedly perpetrated by Bernard Madoff, possibly the largest in history, has reached Israel, too. Among those invested in Madoff's funds and Ponzi scheme are an impressive list of Israeli insurance companies: Harel, Clal and the Phoenix. Estimates of the insurance firms exposure are NIS 40 million for Harel, tens of millions of shekels for the Phoenix and approximately NIS 12 million for Clal. The Technion also has lost money from its own exposure to Madoff and his scheme. It invested funds it raised from donations with Madoff and may have lost NIS 25 million. Advertisement Madoff, 70, was the former chairman of the Nasdaq, and treasurer of the board of trustees at Yeshiva University and chairman of the university's business school; he managed investment funds with over $17 billion in assets. Madoff was arrested last Thursday by U.S. federal agents at his apartment after prosecutors said he told senior employees that his money management operations were "all just one big lie" and "a giant Ponzi scheme." A Ponzi scheme is an illegal investment vehicle that pays off old investors with money from new ones and is dependent on a constant stream of new investment. Because the invested capital is not earning a sufficient return on its own, such schemes eventually collapse under their own weight. In recent years Israeli insurance companies have expanded their overseas investments significantly, as part of the change in investment rules dictated by the Fiance Ministry. The change was intended to allow the insurance companies to diversify their portfolios and vary their investments. The firms took full advantage of the treasury's changes and in certain periods even reached a level where 20% of their investments were overseas. The Phoenix responded: "The company did not make direct investments with Madoff. We are examining whether indirect investments were made and to what extent." Harel refused to comment. The Technion responded: "The money the Technion lost was negligible compared to the amount of money managed by the institution." Hedge funds seem to have taken a huge loss from Madoff's fraud. He said he had only about 25 customers, but it seems huge numbers of people were invested in his funds via other funds, and many had no idea they were exposed to Madoff. Ezra Merkin of Cerberus Capital Management, who was very involved in the proposed sale of Bank Leumi to Cerberus-Gabriel, and is involved in a number of hedge funds, told customers last Thursday that almost all the assets of his Ascot hedge fund. Some $1.8 billion, were invested with Madoff, Merkin wrote his investors in a letter. Merkin was the chief investment manager for the Gabriel fund during the period it was interested in buying a controlling share of Leumi from the state. As for Madoff, he said the fund has hired lawyers to look into the matter. The New York Jewish community was also a large victim of Madoff's apparent fraud. Many of his investors were Jewish philanthropists and charities, many of whom seemed to have lost major amounts,if not all their money. According to the court complaint, Madoff told his family he expected to end up behind bars, but wanted to execute his own version of a bailout package by doling out $200 to $300 million he had left to family, friends and employees. After the meeting, a lawyer for the family contacted regulators, who alerted federal prosecutors and the FBI. Bookmark to del.icio.us   Israel's KKK The desire to march in Umm al-Fahm has nothing to do with protest. A courageous throw Gadhafi's daughter awards the reporter who threw his shoes at President Bush.

Read & React Iraqi police detain local reporter who threw shoes at Bush during farewell Baghdad visit Responses: 118 Benjamin Hartman: Israel's merry band of Klansmen, the far-right Responses: 69 Mass welcome awaits over 200 freed Palestinian prisoners in Ramallah Responses: 58 Far-right Dutch MP: There is no moderate Islam Responses: 79 Umm al-Fahm Mayor: Rightists will never march through our city Responses: 79 Yehuda Ben-Meir: We must not give into Hamas demands Responses: 35 More Headlines 22:36 Hezbollah chief calls on Arab, Muslim world to help lift Gaza blockade 22:12 UN: Israel's expulsion of human rights envoy is 'dangerous' 01:15 Report: Elie Wiesel, Steven Spielberg among victims of Madoff affair 00:08 Netanyahu, Barak reject Livni invitation for political debate 00:16 Arabs across Mideast hail reporter who hurled shoes at Bush 00:13 Spate of mysterious infant deaths prompts health ministry investigation 20:36 Court restricts West Bank separation fence in ruling hailed as precedent 17:04 Abbas: Israel must free all 11,000 Palestinian prisoners 21:36 Rice cites Bush's peace initiative as best chance to end Mideast conflict 01:43 VIEWPOINT: Israel's merry band of Klansmen, the extreme right 15:55 Settler population growing three times faster than rest of Israel, study says 21:19 Barak to Austrian president: I'm not afraid of Gaza op, but I'm not rushing 21:06 Top Defense Ministry official: Gaza truce has no expiration date 17:01 El Al to operate direct flight to Brazil for first time in a decade 18:21 British PM urges Obama to make Mideast peace a top priority 11:44 'There is no moderate Islam,' says far-right Dutch legislator Geert Wilders 12:51 JEWISH WORLD / The Shas version of Obama's 'yes we can' Previous Editions Select Day 15 dec 14 dec 12 dec 11 dec 10 dec 09 dec 08 dec 07 dec 05 dec 04 dec 03 dec 02 dec

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