Monday, 28 July 2014
Last updated 23 min ago
Feb 2 2009 | 1:57am ET
Accused hedge fund fraudster Arthur Nadel spent Super Bowl Sunday in jail after a federal judge denied his bail application.
U.S. Magistrate Judge Mark Pizzo in Tampa, Fla., rejected the Scoop Management chief’s request to be freed on bond, noting he had failed to explain why he disappeared on Jan. 14. He surrendered to authorities on Jan. 27.
“There is a quantifiable risk and simple house arrest with electronic monitoring doesn’t resolve the matter,” Pizzo said. When Nadel’s attorney, Barry Cohen, told the judge that his client has no money left, Pizzo said that proved he couldn’t put up a significant bond, anyway.
Last week, federal securities and wire fraud charges against Nadel were unsealed in New York. He has also been charged by the Securities and Exchange Commission of running a Ponzi scheme, telling investors the six hedge funds he ran were worth $300 million when in fact they had less than $1 million in assets. Nadel managed three of the funds as a subadviser for Valhalla Management and Viking Management, and collected some $95.5 million in management, advisory and incentive fees from 2003 to 2008. He is also accused of transferring at least $1.25 million from two funds to a secret bank account he controlled.
Pizzo reserved for the time being a decision on whether or not to transfer Nadel from Florida to New York for an evidentiary hearing in the criminal case.
Meanwhile, the court-appointed receiver for Nadel’s funds won court approval to confiscate $170,000 based on a pair of checks written by the hedge fund manager in the days before he disappeared, leaving a suicide note.
Nadel wrote the two checks out to Wachovia, one of which was used to create a bank check made out to a Shaul and Annie Blumenfeld for $120,000. The other, for $50,000, was turned into a bank check whose payee could not be clearly made out.
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…