Nadel Law Firm Loses Dismissal Bid

Mar 12 2010 | 8:03am ET

The law firm that prepared the prospectuses for admitted Ponzi schemer Arthur Nadel’s six hedge funds will have to defend themselves against allegations that they were negligent after a judge dismissed their bid to toss the lawsuit.

Florida state court Judge Rick DeFuria did dismiss allegations related to the three hedge funds Nadel ran for his own Scoop Management. But he refused to do for the three funds he ran on behalf of Neil and Chris Moody, Valhalla Investment Partners, Viking Fund and Viking IRA Fund.

The law firm, Holland & Knight, called the lawsuit, filed by court-appointed receiver Burton Wiand, “a poorly-camouflaged attempt by plaintiffs, a group of investment funds, to blame their law firm for their own fraudulent, and, indeed, criminal conduct.”

DeFuria bought that line of argument for the funds on which Nadel was the “sole actor.” But the judge said that, under the law, he must assume Wiand’s allegations are true in considering whether to dismiss the case.

Nadel pleaded guilty last month to defrauding investors of $162 million. He faces up to 24 years in prison when he is sentenced in June. At his plea hearing, he implicated the Moodys, neither of whom has been criminally charged, although both have consented to civil fraud charges.


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Why Is The Shipping Industry Underwater?

Jul 31 2014 | 7:31am ET

Anyone who’s taken a look at the global shipping industry recently probably knows...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note