Florida Fund Manager Missing; Clients Say Money Gone
By Saijel Kishan and Susan Decker
Jan. 17 (Bloomberg) -- Arthur Nadel, a hedge-fund manager in Sarasota, Florida, has disappeared and clients are concerned they may have lost hundreds of millions of dollars, according to law enforcement officials.
Nadel, 76, is president of Scoop Management Inc., which oversees funds including Valhalla Investment Partners LP. He was reported missing three days ago after he called his stepson, Geoff Quisenberry, and told him to go to his house where he had left a note, Lieutenant Chuck Lesaltato of the Sarasota County Sheriff’s Office said yesterday in a telephone interview.
Nadel’s wife, Peg, and Quisenberry, were “concerned about his welfare,” Lesaltato said. Nadel had sounded “distraught,” Lesaltato said, citing the note. Nadel’s partner, Neil Moody, said today he believes Nadel is alive and has spoken to his wife since then.
Scoop may have managed as much as $350 million, although “that may be high because performance results were exaggerated,” Moody said in an interview. He said he contracted with Nadel to manage three funds on his behalf, while Nadel alone had three others and did the trading for all six. Moody said he didn’t know anything was wrong until Nadel was reported missing Jan. 14.
Moody called his broker “and the amount did not jibe with what Mr. Nadel said we had.” As much as $12 million of the Moody family’s money may be lost and how much remains is not known. “It looks very bleak,” Moody said.
Moody said he has sent notes to investors in his three funds alerting them to the possible missing funds.
The note left by Nadel “could be construed as a suicide note, but he’s still alive,” Moody said. “He called his wife a couple of times.” Moody hasn’t read the note and didn’t know the details of the calls between Nadel and his wife.
Nadel was last seen by his wife at 8:45 a.m. on Jan. 14 when he left for work, Lesaltato said. Peg Nadel didn’t answer her home or mobile phone.
Sarasota police opened an investigation yesterday after receiving calls alleging “hundreds of millions of dollars” are missing, Captain William Spitler said in a telephone interview.
The Federal Bureau of Investigation and Securities and Exchange Commission have been called in to investigate, said Sarasota Police Lieutenant Stanley Beishline. The officer said he believes Nadel is alive.
“I think he is, at least until a couple of investors find him,” Beishline said in an interview.
The Herald-Tribune in Sarasota yesterday on its Web site described Nadel as a “prominent player in Sarasota social and philanthropic circles.”
Nadel, who graduated from New York University Law School, was a real estate developer during the 1960s, according to marketing documents for the Valhalla fund, which was incorporated in 1999. The Nadels and others started a firm two years earlier that used computer-generated investment and trading programs, according to the documents. Calls to Scoop’s offices were answered by voice mail.
Scoop provided trading services for Valhalla, Viking and Viking IRA funds under a contract with Moody. Scoop also handled trading for three Nadel funds: Victory, Victory IRA and Scoop Real Estate, Moody said. Moody holds no position in Scoop Management, and was a partner with Nadel only on the Vahalla and two Viking funds.
The disappearance of Nadel comes more than a month after Bernard Madoff, 70, was arrested for securities fraud after allegedly using billions of dollars from new investors to pay off older ones.
Madoff told authorities that investors may have lost $50 billion in a “giant Ponzi scheme,” prosecutors said.
Indiana investment adviser Marcus Schrenker was taken into custody by police in Gadsden County, Florida, earlier this week after he allegedly attempted to fake his death in a plane crash and use a motorcycle to escape. Authorities said Schrenker may have defrauded investors through three companies he owns in a suburb of Indianapolis, CNN reported yesterday.
To contact the reporter on this story: Saijel Kishan in New York at email@example.com; Susan Decker in Washington at firstname.lastname@example.org.