Latest Missing Money Manager Was a Disbarred Lawyer
Posted Jan 22, 2009 7:48 AM CDT
By Debra Cassens Weiss
A Florida hedge fund manager who disappeared last week was a disbarred lawyer, but that fact was never disclosed in a memo for prospective investors in one of his companies.
Sarasota money manager Arthur Nadel left a note threatening suicide, but he later made a call on his cell phone from a town near New Orleans. The Securities and Exchange Commission on Wednesday charged Nadel with fraud, accusing him of overstating the amount in his hedge funds by more than $340 million, according to the Sarasota Herald Tribune. The funds actually held about $1 million, according to the SEC.
Nadel, a graduate of New York University law school, was disbarred in 1982 for taking $50,000 out of an escrow account in a real estate transaction to pay off loan sharks, according to the St. Petersburg Times and a separate article in the Sarasota Herald Tribune.
Nadel told authorities he spent the money out of concern for the president of a realty company whom he represented in the transaction, and it wasn’t clear if he was himself involved with loan sharks, the St. Petersburg Times says. Nadel later repaid the money. But the realty company president told the Herald Tribune he believes Nadel used the money to buy real estate in Florida.
When Nadel sought investors in 2004 for one of his investment companies, Scoop Real Estate Limited Partnership, he did not disclose the disbarment in a private placement memorandum, according to the St. Petersburg Times.
The memorandum lists Holland & Knight as Scoop Real Estate’s general counsel. A law firm representative told the St. Petersburg Times, "We are reviewing our records and have no comment at this time."