U.S. arrests and charges fund manager Nadel

By Grant McCool

NEW YORK (Reuters) - Florida hedge fund manager Arthur Nadel, who went missing two weeks ago, turned himself in on Tuesday and was ordered held on securities and wire fraud charges until a bail hearing on Friday.

Nadel fled after a partner in his firm told him that following the arrest of accused swindler Bernard Madoff in December, the funds should hire an independent accountant to audit the books, an FBI agent said in a court filing.

Nadel, head of Scoop Management, based in Sarasota, Florida, was accompanied by two lawyers when he surrendered to FBI agents in Tampa, an FBI spokesman said. He was led into a Tampa courtroom in handcuffs and leg shackles for a brief appearance before a U.S. magistrate.

In a fraud complaint filed by the U.S. Securities and Exchange Commission last week, investigators said Nadel had valued the six hedge funds he oversaw at more than $300 million (211 million pounds), when in reality they contained less than $1 million.

Nadel was charged with securities fraud in New York because he traded through a brokerage in the city.

The purported fraud is one of several that authorities have announced across the United States following the sharp decline in the fortunes of the financial industry.

Also on Tuesday, the head of a private New York financing firm who was arrested on Monday night has been charged with operating "a classic Ponzi scheme" into which $370 million was invested, U.S. officials said. At a federal court hearing in Central Islip, N.Y., a judge ordered Agape World Inc CEO Nicholas Cosmo held until another hearing on Thursday.

The biggest by far involves New York investment manager Madoff, who authorities said confessed to running a Ponzi scheme over many years with losses of $50 billion. A Ponzi scheme is one in which early investors are paid with the money of new clients.