SEC Charges Missing Florida Fund Manager

The U.S. Securities and Exchange Commission on Wednesday charged missing fund manager Arthur Nadel with defrauding investors at six Florida -based hedge funds.

The SEC said Nadel provided false information to investors about the funds' returns and overstated the value of the investments by about $300 million.

Nadel, the 76-year-old head of a Sarasota fund management company, was reported missing by his family a week ago. Two days later, investors began complaining to police that possibly hundreds of millions of dollars were missing from funds he ran.

The SEC said it obtained a court order freezing Nadel's assets and is seeking disgorgement of illicit profits and civil money penalties.

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"Investors should be able to rely on the truthfulness of an account statement and offering materials," said David Nelson, director of the SEC's Miami regional office, in a statement.

The agency said the six funds appear to have total assets of less than $1 million, contradicting offering materials for three of the funds showing they had about $342 million in assets as of Nov. 30.

The SEC also said that Nadel recently transferred at least $1.25 million from two of the funds to secret bank accounts.

In a suicide note left for his family, Nadel expressed guilt for losing clients' money and felt someone might try to kill him, according to police documents released on Wednesday.

But police said they have tracked calls from Nadel's cell phone, made last week after his reported disappearance, to Slidell, Louisiana; New Orleans, and Mobile, Alabama.

Nadel's disappearance came a little more than a month after authorities arrested New York money manager Bernard Madoff, who is accused of running a $50 billion fraud.

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