SEC Receiver for Arthur Nadel’s Scoop Capital Hedge Funds Moves to Settle Malpractice Claim Against Law Firm Holland & Knight

In January 2009, hedge fund sponsor Arthur Nadel disappeared, and his $300 million Ponzi scheme collapsed.  Law firm Holland & Knight LLP, and one of its partners (together, H&K), had provided legal services to Nadel’s funds and management companies.  A receiver for Nadel’s funds was appointed at the request of the Securities and Exchange Commission.  As part of his efforts to recover funds for investors, the receiver sued H&K for malpractice.  H&K has recently agreed to settle that malpractice litigation for $25 million.  The receiver has asked the court supervising the receivership to approve the settlement.  This article provides background on Nadel’s fraud and summarizes the terms of the H&K settlement.

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