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SEC Sues Hedge Fund Manager Art Nadel

MANHATTAN (CN) - Florida hedge fund manager Arthur Nadel defrauded investors of $360 million in a 10-year scheme, federal prosecutors say. Nadel, 76, is charged with skimming millions of dollars from accounts, in addition to the tens of millions he took in management fees. Nadel disappeared for two weeks in January before surrendering to the FBI.

Prosecutors say Nadel promised returns of 18% to 48%, and created bogus account statements to show those returns. He claimed he had earned more than $270 million for clients while he actually was losing money, according to the indictment. Nadel's funds were known as Scoop Real Estate, Victory Fund, Victory IRA Fund and Valhalla Management, all based in Sarasota.

Nadel is locked up awaiting arraignment, unable to post $5 million bail. His assets have been frozen by the Securities and Exchange Commission.

Nadel faces six counts of securities fraud, eight counts of wire fraud and one count of mail fraud. Each count carries a maximum to 20 years in prison. Prosecutors also seek forfeiture of $360 million and property.

Nadel was arrested in Florida but was sent to New York to face charges because he traded through a brokerage in the city.

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