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Tuesday, February 9, 2010
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SEC has ‘scoop’ on vanished hedger’s funds
The SEC has filed charges against the hedge fund manager whose mysterious disappearance seven days ago prompted the regulator and the Federal Bureau of Investigation to mount an investigation InvestmentNews, Jan. 19.
Arthur Nadel, 76, of Sarasota, Fla., was charged with falsely overstating the value of six hedge funds that he advised by approximately $300 million. The hedge funds had only about $500,000 in assets, the Securities and Exchange Commission said yesterday. He recently transferred at least $1.25 million from two of the funds to secret bank accounts that he controlled, the SEC said. The SEC also accused two entities which Mr. Nadel controlled — Scoop Capital LLC and Scoop Management Inc., of Sarasota — for engaging in the fraud. The SEC said the two entities provided investment advice to the six hedge funds. From January 2008 until the present, the defendants “massively overstated the hedge funds’ historical investment returns and the value of their assets in account statements provided to investors,” read the complaint. The regulator did not estimate investor losses. It asked the court for an emergency order freezing the assets of the defendants.
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