Nadel Bail Hearing Delayed Until Thursday

Feb 17 2009 | 1:25am ET

Accused hedge fund fraudster Arthur Nadel could soon join his indicted brethren Bernard Madoff and Marc Dreier free on bail in New York City.

A federal judge in Manhattan delayed her decision on Nadel’s bail application by a week, ordering prosecutors and Nadel’s legal team to negotiate terms. The parties are due back in court on Thursday; Nadel will cool his heels in a Manhattan jail cell at least until then.

Nadel made his first appearance in a New York courtroom on Friday, after being transferred from his home state of Florida last week to face federal charges of securities and wire fraud. He is accused of defrauding investors in his six hedge funds of some $300 million.

Earlier this month, a federal judge in Tampa, Fla., denied Nadel’s bail, declaring him a flight risk. Prosecutors seem to agree, noting that the Scoop Management chief traveled across the country during the two weeks before he surrendered to authorities. Nadel disappeared on Jan. 14, leaving behind a suicide note and making stops in Louisiana, Texas, Georgia and California before his arrest by the Federal Bureau of Investigation in Tampa on Jan. 27.

But Nadel’s lawyers deny that their client was running from the law. Barry Cohen told Judge Denise Cote that “he was trying to figure out what he was going to do with his life” after his hedge funds began to unravel.

Another lawyer for the accused fraudster, Todd Foster, told the court that the losses suffered by his client’s clients in the alleged Ponzi scheme are “nowhere near $300 million, maybe a third of that,” and that Nadel is willing to cooperate with the Securities and Exchange Commission and the court-appointed receiver for his funds.

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