Breaking News 2:24 p.m. EST (U.S.A.). The Securities & Exchange Commission has just accused missing fund manager Arthur Nadel of fraud.
“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,” the SEC said. “In contrast, the Funds appear to have total assets of less than $1 million.”
Nadel has been missing since Jan. 14. The Sarasota Herald-Tribune reported today that he was believed to have been in Louisiana in recent days and told family members in a suicide note that he believed people might kill him.
SEC investigators also allege that Nadel recently moved $1.25 million into a secret account.
A judge today grantedÂ a temporary restraining order, an asset freeze, and preliminary injunction against Nadel and preliminary injunctions and asset freezes against Scoop Capital and Scoop Management.
“In addition, the complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and civil money penalties against all the defendants,” the SEC said. “Without admitting or denying the allegations of the complaint, defendants Scoop Capital and Scoop Management consented to the entry of, among other things, preliminary injunctions, asset freezes, and the appointment of a Receiver.”
The complaint also names as relief defendants two investment management companies, Valhalla Management, Inc. and Viking Management, LLC, and the six 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. The complaint seeks disgorgement plus prejudgment interest against each of the relief defendants.
Nadel simply doctored client statements, pulling numbers from thin air, the SEC said.
“[O]ne e investor from Virginia who invested in the Victory IRA Fund received a statement for October 2008 indicating his investment was valued at $599,551.55, and a November 2008 statement indicating his investment was valued at $602,965.39,” the SEC said in its complaint.
“This same investor made a second investment in Victory IRA Fund through another account and
subsequently received an October 2008 statement indicating this investment was valucd at
$172,354.07, and a November 2008 statement indicating this investment was valued at
“These statements were false because the total value of the entire Victory IRA Fund’s holdings was only $2,938.86 at the end of October and November 2008,” the SEC said.
Read the SEC complaint.