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Robert Trigaux

SEC charges Nadel with fraud, diverting funds



Artnadel It's official. The Securities and Exchange Commission charged (missing since Jan. 14) Sarasota money manager Art Nadel, 76, with fraud in connection with six hedge funds for which he acted as the principal investment advisor. According to the SEC’s complaint, Nadel provided false and misleading information for dissemination to investors about the funds’ historical returns and falsely overstated the value of investments in the funds by approximately $300-million. (Photo courtesy of Sarasota Herald-Tribune.)

So begins the SEC's news release about Nadel, who apparently fled Sarasota, his family and a bunch of upset investors last week. Here's the latest report from the hometown newspaper, the Sarasota Herald-Tribune.

Along with Nadel, other entities are named in the SEC complaint, including: two investment management companies he controls, Scoop Capital, LLC and Scoop Management, lnc. The fraud concerns six hedge funds: Scoop Real Estate, L.P, Valhalla Investment Partners, L.P., Victory IRA Fund, Ltd, Victory Fund, Ltd, Viking IRA Fund, LLC, and Viking Fund, LLC; and two other investment management companies -- Valhalla Management, Inc. and Viking Management.

The six funds appear to have total assets of less than $1-million, the S.E.C. said in a civil lawsuit filed in Federal District Court in Tampa. To investors, the funds were presented with assets of more than $300-million.

According to the SEC's 13-page legal complaint, at the same time he was deceiving investors, Nadel maintained secret bank accounts which only he controlled, in the names of at least two of the hedge funds. He recently transferred $1.25-million from the Viking IRA Fund and Valhalla Investment Partners to one of
the secret accounts, alleges SEC senior trial counsel Scott Masel in the complaint.

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 11:23am]


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