Florida Hedge Fund Manager Charged with Fraud By SEC
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.
