Investors in Arthur Nadel’s hedge funds lost almost half of their money in the alleged scam, according to a court-appointed receiver.
A report from receiver Burton Wiand put the losses suffered in Nadel’s six hedge funds at about $168 million. Wiand said that has found about 371 investors who invested some $371 million with Nadel, who managed three hedge funds through his Sarasota, Fla.-based Scoop Management and three others as a subadviser.
Nadel was arrested in January and charged with securities and mail fraud. At the time, prosecutors said he had told investors his funds were managing more than $300 million when in fact there was less than $125,000 in the funds’ accounts.
Wiand’s report, submitted as part of the Securities and Exchange Commission’s civil suit against Nadel, says Nadel paid out some $53 million in “fictitious profits” as part of his Ponzi scheme.
Nadel has yet to respond to the charges against him, and last week won a 30-day continuance to find new lawyers after he was unable to pay his former attorneys. He remains in custody in New York.