"The Most Consistent Returns I Have Ever Seen"
Nadel's funds purportedly returned 21.6% in 2002 and 19.8% in 2001, years when the S&P 500 index returned -23.3% and -13.0% respectively. An article in The Wall Street Digest by Donald H. Rowe, Chairman of Carnegie Asset Management, cited the superior returns of Nadel's funds as "the best track record and most consistent returns I have ever seen." Rowe apparently ignored initial misgivings about the source of Nadel's returns, writing: "My curiosity about Nadel's computerized trading program eventually led to a due diligence visit to the offices of Nadel & Moody. Understandably, I did not learn the various mathematical formulas in Nadel's "black box" computer program."
Despite the statistical improbability of the stated returns, Rowe's article offers a glowing recommendation and includes contact information for the funds. Fine print disclosures in the article reveal that "Carnegie Asset Management is affiliated with The Wall Street Digest, Inc., as is The Wall Street Trader, Inc. Carnegie Asset Management, from time to time, makes referrals to MRM Asset Allocation Group, Inc. ,and/or The Nadel Moody Group, registered investment advisors not affiliated with each other nor with Carnegie Asset Management, for which Carnegie Asset Management receives monetary compensation."
Burton Wiand’s April, 2009 interim receiver's report, submitted as part of the Securities and Exchange Commission’s civil suit against Nadel, says Nadel paid out some $53 million in “fictitious profits” as part of his Ponzi scheme.
Read more about this topic: Arthur Nadel
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