A former hedge fund’s past has come to haunt the present of former New York City Mayor Ed Koch. According to Reuters, Richard Williamson, the administrator for defunct hedge fund Lipper Convertibles, says Hizzoner was dishonorable by holding on to alleged “overpayments” of earnings he received from his nearly $3 million investment in the wrongly valued hedge fund. Reuters says the overstatement was first discovered after Lipper’s then-portfolio manager Edward Strafaci and then-head researcher Michael Visovsky quit in 2002, after which the firm went dark. In a suit filed New York State Supreme Court, a trial court, Williamson, who is trying to recoup the money for the fund estate, charges Koch was “unjustly enriched” to the tune of nearly $550,000 as a result of the overvaluation. The former mayor, now a partner at the law firm Bryan & Cave, received about $724,000, instead of the real figure of $175,000. According to the lawsuit, the overpayment represents “a windfall by virtue of [Koch] having withdrawn from the partnership before the overvaluation was discovered;" with interest, that profit reportedly jumps to close to $1 million.” Koch, who says he hasn’t seen the suit, did not comment. Incidentally, the hedge fund’s founder, Ken Lipper, was a deputy mayor under Koch and author of the book Wall Street, which went on to be made into the motion picture.
