Yeshiva U. still reeling from $100m loss in Madoff scandal
Moody's Investors Service cuts the school's rating to junk, Bloomberg News reports.
More than five years after financier Bernard Madoff was arrested for masterminding the largest Ponzi scheme in United States history, Yeshiva University continues to reel from its $100 million loss, Bloomberg News reported on Wednesday.
According to Bloomberg, the New York-based university has warned its budget deficits may get worse, and it failed to produce a financial report on time for the year ending June 30, 2013 – prompting Moody’s Investors Service to cut the school's rating to B1 this month.
That makes Yeshiva "the only university with an endowment of more than $1 billion that [Moody's] ranks as junk," Bloomberg noted, adding that Yeshiva’s mark in 2008, prior to the Madoff scandal, was the third-highest grade.
Moody's said that the university has had trouble controlling operating costs and has delayed implementing system-wide accounting practices.
It has also angered faculty by introducing salary freezes at a time when its president, Richard Joel, earns well more than $1 million per year. Joel did, however, agree to a symbolic $100,000 pay cut.
Yeshiva's annual deficits totaled hundreds of millions of dollars from 2010 to 2012, according to Bloomberg News. In 2010, its deficit was $107.5 million, while in 2011 it stood at $46.7 million and in 2012 it was $105.9 million.
Madoff, 75, who stepped down from the Yeshiva University board, is currently serving a 150-year prison term for the $65 billion scheme that affected some 4,800 clients, including private clients, numerous Jewish educational institutions and non-profits.