Lawsuit Targets Investment Writer Who Touted Arthur Nadel’s Hedge Funds

Six victims of <"">Arthur Nadel’s alleged Ponzi scheme have filed a lawsuit against the investment writer who once dubbed the accused swindler “America’s Top-Ranked Money Manager.” According to, the lawsuits’ plaintiffs claim they took writer Don Rowe seriously when he wrote complimentary articles about Nadel. The lawsuit also names The Wall Street Digest and Carnegie Asset Management Inc. as defendants.

Nadel was president of Scoop Management Inc., which managed six private investment funds. The funds managed by Scoop included Viking IRA, Valhalla Investment Partners LP, Viking, Victory, Victory IRA and Scoop Real Estate. Viking IRA, Valhalla and Viking funds were managed by Nadel under contract with his partners, Neil and Chris Moody.

Nadel disappeared on January 14, a day before he was to deliver a $50 million payout to investors. He left his family a purported suicide note, but it was always suspected that Nadel was alive and on the run.

Nadel turned himself in to the <"">FBI in Tampa two weeks later. He was charged with one count each of securities fraud and wire fraud, and his case was moved to federal court in Manhattan. Nadel is in jail, having been unable to meet the conditions of a $5 million bond. If convicted, Nadel could face a maximum of 20 years in prison on each charge.

The lawsuit against Don Rowe alleges that his Carnegie Asset Management unit “received referral fees from Arthur Nadel, Neil Moody, Christopher Moody and/or their hedge funds in exchange for the defendant’s fraudulent recommendations that plaintiffs invest in the foregoing hedge funds.”

According to the complaint, between 2001 and 2004, Rowe authored various promotional pieces, as well as articles for The Wall Street Digest, in which he claimed to have personally conducted a “due diligence visit to the offices” of both Nadel and his business partners. In one such piece, Rowe wrote: “After 26 years of reviewing the track records of over 11,000 mutual funds, 6,000 money managers and 5,800 hedge funds, Nadel’s computerized investment program has produced the best track record and most consistent returns I have ever seen.”

In reality, the lawsuit claims, “none of the hedge funds had audited financial statements, that the accountant for the hedge funds had lost his license to practice as a certified public accountant in Florida, and that investors had paid extraordinary fees — totaling more than $90 million by the time this fraud was discovered — to Mr. Nadel and his business partners, Neil Moody and Christopher Moody.”

By participating or aiding in the sale of the now-failed hedge funds, Rowe also engaged in securities fraud, the suit claims.

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