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Stationary from Bernard L. Madoff's estate are seen on display before they are auctioned off on Saturday at the Miami Beach Convention Center on June 2, 2011 in Miami Beach, Fla. - 

Jeremy Hobson: There's a new settlement related to the Bernie Madoff Ponzi scheme. But this one doesn't involve people who invested with Madoff directly. It's about a money manager named Ezra Merkin, who has agreed to pay more than $400 million dollars to his former customers who lost billions when he invested their money with Madoff.

Marketplace's John Dimsdale reports.

John Dimsdale: Merkin claimed he was an investing guru who was actively managing his clients money.  But New York's Attorney General accused Merkin of simply putting two and a half billion dollars of their money into Madoff's Ponzi scheme.  Many investors including charities, nonprofits and universities, didn't know Merkin was sending their money to Madoff.

Finance lawyer Bill Singer says they should have asked more questions.

Bill Singer: The average American will spend days if not weeks looking into buying a used car and test driving that car.  But they will without a second thought write out a check to someone they know nothing about to put in an investment that they haven't confirmed and then whine and complain and cry when they find out they've been defrauded.

With this settlement, Merkin's customers will receive an average 40 percent of the money they lost.  Other suits involving money lost to Madoff are pending.

In Washington, I'm John Dimsdale for Marketplace.