20-01-2009, 05:20 AM
Fears of Madoff-style Scandal As Florida Fund Manager Goes Missing
FBI called in after Arthur Nadel disappears amid claims his hedge fund is empty. By Andrew Clark
The disappearance of a Florida hedge fund manager has raised the possibility of another Madoff-style scandal in the United States, with fears mounting that an estimated $350m (?242m) of investments may have evaporated.
Police in Sarasota, a city of 52,000 people south of Tampa, have called in the FBI to help in the hunt for Arthur Nadel, president of Scoop Management, who was last seen by his wife when he left home for work on Wednesday.
Nadel's green Subaru car was found at Sarasota's airport on Thursday. The 76-year-old called his stepson that day to try to retrieve a letter interpreted by family members as a possible suicide note.
Associates at Nadel's firm have told clients that the company's funds appear to be empty. In a letter to investors, Nadel's business partner, Neil Moody, said the funds "may have virtually no remaining value". The Securities and Exchange Commission, the US financial watchdog, has begun an investigation.
Moody said Scoop was facing hefty redemption calls from customers who wanted to take out their money. The case has drawn comparisons with the scandal surrounding the Wall Street financier Bernard Madoff, who is accused of hiding losses of $50bn.
Scoop's clients include an estimated 300 local residents and non-profit organizations. The local YMCA Foundation had $1.1m invested, originally a gift from Nadel's business partner, given on condition it was managed by the firm.
The foundation's president, Karin Gustafson, told the Guardian: "This is a very puzzled community. We're very anxious to get some answers."
She said her organisation faced the loss of 13% of its total endowment: "We're assessing the situation. We're sitting back here: we're not rushing to judgment, we're waiting for the facts to unfold."
Run out of a store front with a green awning on Sarasota's high street, Scoop Management's six funds have grown from $10m to what clients were told was $350m over the course of a decade, according to the Sarasota Herald-Tribune newspaper.
A former New York jazz pianist, Nadel and his wife, Peg, have been fixtures on Sarasota local social scene and prominent supporters of arts causes including the city's ballet. Scoop began as a club for day traders called "the inside Scoop" before evolving into a hedge fund.
In claims which echo the much larger Madoff scandal, Nadel reportedly provided statements to customers showing typical returns of 8% to 12% annually. He claimed to be achieving such success through a complex technique of hedging purchases of stock with "short" positions to minimize the risk of falls in price.
In a statement over the weekend, Nadel's family acknowledged all was not as it seemed: "The employees of Scoop Management, which include Peg Nadel, the wife of Arthur Nadel, have just learned that they, along with many others who have invested money with Art, have been victimized by his unauthorized actions."
Upheaval in the financial markets has sparked a series of scandals concerning renegade financiers. An Indiana investment adviser, Marcus Schrenker, was arrested last week after faking his own suicide by parachuting out of a private plane. He faced legal claims over millions of dollar of allegedly misappropriated funds.
The once buoyant hedge fund industry has been left in tatters by unprecedented volatility. According to Chicago-based Hedge Fund Research, 693 funds were liquidated in the first nine months of 2008, a 70% increase on the previous year.
In Sarasota, the authorities said at least five people had filed complaints against Nadel over missing funds. Police lieutenant Stanley Beishline told Bloomberg News he believed Nadel was alive: "I think he is, at least until a couple of investors find him."
http://www.buzzle.com/articles/246514.html
FBI called in after Arthur Nadel disappears amid claims his hedge fund is empty. By Andrew Clark
The disappearance of a Florida hedge fund manager has raised the possibility of another Madoff-style scandal in the United States, with fears mounting that an estimated $350m (?242m) of investments may have evaporated.
Police in Sarasota, a city of 52,000 people south of Tampa, have called in the FBI to help in the hunt for Arthur Nadel, president of Scoop Management, who was last seen by his wife when he left home for work on Wednesday.
Nadel's green Subaru car was found at Sarasota's airport on Thursday. The 76-year-old called his stepson that day to try to retrieve a letter interpreted by family members as a possible suicide note.
Associates at Nadel's firm have told clients that the company's funds appear to be empty. In a letter to investors, Nadel's business partner, Neil Moody, said the funds "may have virtually no remaining value". The Securities and Exchange Commission, the US financial watchdog, has begun an investigation.
Moody said Scoop was facing hefty redemption calls from customers who wanted to take out their money. The case has drawn comparisons with the scandal surrounding the Wall Street financier Bernard Madoff, who is accused of hiding losses of $50bn.
Scoop's clients include an estimated 300 local residents and non-profit organizations. The local YMCA Foundation had $1.1m invested, originally a gift from Nadel's business partner, given on condition it was managed by the firm.
The foundation's president, Karin Gustafson, told the Guardian: "This is a very puzzled community. We're very anxious to get some answers."
She said her organisation faced the loss of 13% of its total endowment: "We're assessing the situation. We're sitting back here: we're not rushing to judgment, we're waiting for the facts to unfold."
Run out of a store front with a green awning on Sarasota's high street, Scoop Management's six funds have grown from $10m to what clients were told was $350m over the course of a decade, according to the Sarasota Herald-Tribune newspaper.
A former New York jazz pianist, Nadel and his wife, Peg, have been fixtures on Sarasota local social scene and prominent supporters of arts causes including the city's ballet. Scoop began as a club for day traders called "the inside Scoop" before evolving into a hedge fund.
In claims which echo the much larger Madoff scandal, Nadel reportedly provided statements to customers showing typical returns of 8% to 12% annually. He claimed to be achieving such success through a complex technique of hedging purchases of stock with "short" positions to minimize the risk of falls in price.
In a statement over the weekend, Nadel's family acknowledged all was not as it seemed: "The employees of Scoop Management, which include Peg Nadel, the wife of Arthur Nadel, have just learned that they, along with many others who have invested money with Art, have been victimized by his unauthorized actions."
Upheaval in the financial markets has sparked a series of scandals concerning renegade financiers. An Indiana investment adviser, Marcus Schrenker, was arrested last week after faking his own suicide by parachuting out of a private plane. He faced legal claims over millions of dollar of allegedly misappropriated funds.
The once buoyant hedge fund industry has been left in tatters by unprecedented volatility. According to Chicago-based Hedge Fund Research, 693 funds were liquidated in the first nine months of 2008, a 70% increase on the previous year.
In Sarasota, the authorities said at least five people had filed complaints against Nadel over missing funds. Police lieutenant Stanley Beishline told Bloomberg News he believed Nadel was alive: "I think he is, at least until a couple of investors find him."
http://www.buzzle.com/articles/246514.html
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.