Florida Fund Manager Disappears as Clients Report Missing Money

Date: Monday, January 19, 2009
Author: Saijel Kishan, 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 two 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 today 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.

Scoop may have managed as much as $350 million, the Herald- Tribune in Sarasota reported today on its Web site. The newspaper said Nadel was a “prominent player in Sarasota social and philanthropic circles.” It described his note as a suicide note.

Nadel was last seen by his wife at 8:45 a.m. on Jan. 14 when he left for work, Lesaltato said.

Sarasota police launched an investigation today after receiving calls since 1:30 p.m. concerning allegations about “hundreds of millions of dollars” missing, Captain William Spitler said in a telephone interview.

Computer-Guided Trading

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.

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 today.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net