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.
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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.