Missing Florida fund manager who left suicide note charged

— -- In a case similar to the Bernard Madoff scandal, federal securities regulators Wednesday charged a missing Florida hedge funds manager with fraud for allegedly misleading investors and overstating the funds' value by about $300 million.

The Securities and Exchange Commission filed three fraud charges against Arthur Nadel, 76, of Sarasota, Fla., who disappeared Jan. 14 after leaving behind a purported suicide note for his family.

The SEC obtained a court order freezing Nadel's personal and business assets.

In the note, Nadel told his wife, Marguerite, he felt "extreme guilt" at having lost money for dozens of investors, according to a Sarasota County Sheriff's Office report. Some investors would like to kill Nadel over his financial management, but "he will do it himself," the report stated.

Tracking Nadel's cellphone transmissions, investigators traced him to New Orleans, where the trail ended last week. Nadel's disappearance has been turned over to the FBI.

The missing money manager's wife could not be reached Wednesday. Geoff Quisenberry, a stepson who was also directed to the purported suicide note by Nadel, declined to comment when contacted by phone Wednesday.

In the lawsuit filed in Tampa federal court, the SEC said Nadel recently transferred $1.25 million from two of his hedge funds to a secret bank account he controlled.

Although Nadel told investors the hedge funds' assets exceeded $300 million, the funds actually held about $506,000, the SEC charged.

That scenario evokes comparisons to the scandal around Madoff, a financier accused of running a Ponzi scheme that may involve $50 billion in losses.

Sarasota authorities have been fielding calls from Nadel's investors around the country. According to the SEC complaint, a Virginia investor got a November statement valuing his hedge fund investment at nearly $603,000. But the fund's value was actually less than $3,000 at the time, the SEC charged.

Mace Security International, a Pennsylvania-based manufacturer of personal defense sprays and other security products, disclosed Tuesday that the firm lost half of the $2 million it invested in the Victory fund, one of six hedge funds operated by Nadel.