Bloomberg - Marc Dreier, the New York lawyer jailed since his arrest for allegedly cheating hedge funds, won’t be able to post the $20 million bond that would free him, his lawyer told a federal judge.

U.S. Magistrate Judge Douglas Eaton in New York today modified an earlier ruling that ordered Dreier held without bail until trial. Eaton required Dreier to have four co-signers and submit to home detention and electronic monitoring. Dreier’s lawyer, Gerald Shargel, said he will probably appeal.

“Effectively, that will keep my client in jail,” Shargel told Eaton, the same judge who set $10 million bail for accused swindler Bernard Madoff, who is charged with running an unrelated $50 billion Ponzi scheme.

Dreier, 58, was arrested Dec. 7 on charges that he persuaded two unidentified hedge funds to give him more than $100 million by falsely claiming he was selling at a discount notes issued by Sheldon Solow, a New York developer. Prosecutors later said “very sophisticated investors” lost $380 million. In a letter to the judge yesterday, they said that the loss topped $400 million.

Dreier, a graduate of Harvard Law School and Yale College, hasn’t formally responded to the wire- and securities-fraud charges. Prosecutors, who arrested Dreier on a criminal complaint, must file an indictment with the court by Feb. 7, Shargel said outside the courtroom.

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