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76-year-old Arthur Nadel faces 40 years in prison and fines of up to $5.25 million for alleged securities fraud and wire fraud.

Arthur Nadel, a Sarasota, FL resident, operated two firms: Scoop Management and Scoop Capital which controlled six different hedge funds: Victory, Victory IRA, Viking IRA, Scoop Real Estate, Valhalla Investment Partners and Viking Funds.

In Allen Stanford style, Nadel misled 500 to 600 investors nationwide, purporting assets of nearly $350 million when, in reality, they totaled only about $1 million. Also, last year's returns were negative, but Nadel told his clients their returns were 11 and 12%. The Securities and Exchange Commission (SEC) has charged Nadel with securities fraud and wire fraud and has frozen his assets, both personal and business.

The Search for Nadel

Just after the Bernie Madoff bust, partners at Nadel's Scoop Management and Scoop Capital suggested he hire an independent accountant to audit the books. According to reports by USA Today, Nadel agreed to the audit on January 8th and disappeared on January 14th.

The next day, authorities found Nadel's vehicle in a local airport parking lot. He also left his wife a handwritten note explaining he left documentation enough for her to take over what is left, "even documentation for divorce" and felt "extreme guilt." He also advised her to withdraw money as soon as possible, knowing the assets would be frozen shortly.

Federal officials traced Nadel's cell phone transmissions to New Orleans and on January 27th he surrendered to officials in Tampa. Later that day he was seen in a courtroom wearing shackles. The judge handling the case, Mark Pizzo, denied bail for the swindler claiming he was a flight risk and might have money stashed away somewhere.

The Damage

According to the SEC, Nadel has been running his investment fraud since 2004. During that time Mace Securities International invested $2 million dollars with Nadel and lost nearly half. Another investor is left with only $3,000 after a recent statement lists his fund as worth $603,000.

In an attempt to recover lost investments and repay swindled investors, Nadel agreed to work with the SEC, identifying his assets. According to reports, however, he has been uncooperative. Authorities have discovered that $1.25 million was recently transferred from two of the hedge funds into a secret personal account and found two private jets and 500 acres of land in North Carolina.

Securities Fraud Attorney

Sorting through the tangled mess fraudsters like Nadel create can be exhausting. A securities attorney with expertise in cases like this can help you find the answers and resources you need to recover lost investments.

If you have lost money in a securities fraud, contact an experienced secuities fraud attorney at Arnold & Itkin LLP for a free evaluation of your case.

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Concerns over the increasing number of investment fraud schemes being uncovered have spurred Florida’s lawmakers to introduce legislation they hope will protect investors.

Two southwest Florida lawmakers, Representatives Tom Grady and Senator Garrett Richter, have collaborated with Florida attorney general Bill McCollum to introduce a bill known as the Florida’s Securities and Investors Protection Act. The proposals aim at enhancing the attorney general's powers to begin investigating possible fraud sooner. Prosecutors will need less proof to pursue a case, enabling them to easily crack down on any violations that come to their attention. The bill will also provide for stricter registration requirements for investment advisers and brokers.

Florida has been hit particularly hard in the recent series of investment fraud scandals that have come to light. The victims of Bernie Madoff's scheme included a large number of retirees who invested their funds in the scheme and moved to Florida to live out their golden years. Soon after in January, hedge fund manager Arthur Nadel surrendered in Tampa after leading investigating officers on a cross country chase. Nadel is being sued by federal regulators for inflating investment values in the funds he managed by approximately $300 million.

According to attorney general McCollum, the current system to investigate investment fraud in Florida is in dire need of change. Under the present system, prosecutors cannot interfere in a case until the financial regulation office refers it to them. The new bill allows the attorney general's office to initiate civil investigations.

A lack of attention and poor regulatory practices, both at federal and state levels, has allowed the likes of Madoff, Nadel and more recently, Allen Stanford to continue their fantastical schemes with no fear of getting caught. Their schemes remained under the radar as long as the economy was fine and credit was flowing freely. The credit squeeze has exposed a number of these schemes, audacious Ponzi schemes for the most part.

Investment Fraud Attorney

Pursuing claims in an investment or securities fraud can be a complex affair. Authorities may have access to more than one source for dispensing compensation and the amount of compensation for each investor who lost money can vary. 

A professional investment fraud attorney can help you recover damages from all sources possible. If you have lost money in a fraudulent scheme, contact an investment fraud attorney at Arnold & Itkin LLP for a free evaluation of your claim.

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The Securities and Exchange Commission (SEC) has charged a Florida hedge fund manager with fraud, claiming he overstated a total of six funds by approximately $300 million.

Arthur Nadel disappeared on January 14, just one day before he was expected to repay $50 million to investors who had caught on to his scam. He left a suicide note claiming he felt "extreme guilt over taking business actions" that resulted in the loss of his investors' money.   A week after the suicide note was found, Nadel, according to Forbes, called his wife from New Orleans, Louisiana. The call was traced by police officers who are now on the hunt for yet another investment manager who has decamped with investor millions.

According to the SEC complaint, more than a million dollars from two of the hedge funds were transferred to several bank accounts controlled by Nadel. Nadel has been the director and president of Scoop management, and has managed hedge funds, since 1999. He had been managing a total of six funds for about 600 investors.  The hedge fund scam seemed to have been going on for at least a year, during which time he inflated the value of the investment to $300 million. In reality, the value of the funds is closer to $500,000. Nadel also posted returns that the SEC says in its complaint, were blown out of proportion. Two of his hedge funds actually lost money during the reported time and another posted returns that were lower than he reflected. Since his disappearance, at least 45 people have filed complaints about him.

The financial meltdown does have a silver lining – it has begun to quickly expose fraudsters like Bernie Madoff and Arthur Nadel who would, in a healthy economy, have hidden in the woodwork and continued their Ponzi schemes.

Hedge Fund Fraud Lawsuit

There's nothing more frustrating than handing over your hard earned money to an investment broker or manager and learning, all too late, that those juicy digits at the bottom of your returns sheet are actually nowhere near that bloated number, and are quite likely, much lower than you thought. The task of pursuing claims against these advisors and managers is just as frustrating. It helps to rely on an expert hedge fund fraud attorney to make a claim so you can begin recovering your investment.

If you have lost money in a hedge fund investment fraud, contact an experienced investment fraud lawyer at Arnold & Itkin LLP for a free consultation.

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