Last year, New York University won a court battle against a convicted hedge fund scammer who was seeking his undergraduate degree from the school. Now, NYU will be looking for another win in court as it goes up against a second hedge fund fraudster. Ayal Rosenthal, whose family owns and controls the Aragon Capital Advisors hedge fund, is suing NYU for breach of contract after it revoked his MBA degree.
According to SEC charges, Rosenthal was involved in an insider-trading circle that also included his father and two brothers, as well as the Aragon fund. He was convicted of leaking non-public information while working as an accountant at PricewaterhouseCoopers and sentenced to two months in prison. Rosenthal was attending NYU’s Leonard N. Stern School of Business part-time when the alleged violations took place.
The minutes of a Stern faculty meeting dated Oct. 3, 2007 record the school’s decision not to award Rosenthal’s MBA. The student, who had already pled guilty to intending to commit securities fraud, had broken Stern’s code of conduct, according to the minutes. But Rosenthal’s ongoing lawsuit, filed in June 2008, claims the decision was “unfair and excessive,” according to the New York Post. He also objects to a seven-month delay in holding a hearing, which the university said was due to “the unusual nature of the violation.”
--Robert Murray