MIT Innovation

Reuters reports: Boston hedge fund shuttering after Madoff bet.

Hedge-fund firm GMB Capital Management, run by a Massachusetts Institute of Technology professor, is shutting a fund after losing more than $50 million on bad bets that included putting money with accused swindler Bernard Madoff, people familiar with the matter said.

The Boston-based GMB Low Volatility Fund L.P., which had more than $100 million in assets and was run by Gabriel Bitran of MIT's Sloan School of Management and his son, Marco, began liquidating late last year, the people said.

The fund once wooed investors with promises that it would rely heavily on the MIT professor's complicated algorithms to deliver low volatility where prices almost never change.

Instead, the father and son team seems to have done exactly the opposite -- funneling a big chunk of money to Madoff, a financier accused last month of having run a $50 billion Ponzi scheme, investors fumed.

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