FBI joins Nadel hunt as details trickle out
No, missing Sarasota money manager Art Nadel (nor his missing $350-million in investor funds) has not been found yet, but the FBI reportedly is now involved in the search. And the growing impact of investors and Sarasota institutions that are out a lot of money gains increasing coverage in the Sarasota Herald-Tribune and other media. Here's a good video news report on the situation. Here's how the Herald-Tribune story describe Nadel's investing strategy:
"He would typically hold a set of fund positions in stock index options or futures, typically the Nasdaq or the Amex 100. He would keep one third of the money in cash, while betting on a rise with a third and betting on a decline with a third. Funds like this are supposed to thrive in volatile markets. Theoretically, during a huge stock decline, they would experience a loss on the leveraged upside or long speculation but make an even bigger profit on their downside bets, which would become suddenly popular with the crowd."
The Sarasota Police Department had received at least seven complaints as of Sunday from investors, some of whom say they have lost upward of $700,000. Here's one tale from Bloomberg News of an investor who learned the hard way that his investment returns were too good to be true:
"Brad Lerner was pleased when a November statement showed his $500,000 investment in a fund run by Arthur Nadel had gained 8.5 percent for the year as the Standard & Poor’s 500 Index fell 39 percent. Lerner, an internist from Sarasota, Florida, never got a December statement.
"Instead, one of Nadel’s partners came to him last week with the news that the fund manager couldn’t be found. Lerner, 55, and others whose money was invested by Nadel’s Scoop Management Inc. in Sarasota may have lost as much as $350 million, law enforcement officials say."
Lerner told Bloomberg News that the FBI told him Nadel, 76, had last called his wife Peg from New Orleans.
In addition to Nadel's involvement as principal investor for Sarasota funds under the names of Scoop Management, Viking and Valhalla, he and wife Peg are also majority co-owners of a home-building business called Home Front Homes. This undated photo, from the company's Web site, shows Art and Peg Nadel on the far right. The other people are not identified. The business, started in 1999 and based in Englewood, sells prefabricated housing shells.
-- Robert Trigaux, Times Business Columnist