Tuesday, 3 March 2015
Last updated 1 hour ago
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.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…