HeraldTribune.com – An attorney representing newsletter writer Don Rowe, who strongly recommended Arthur G. Nadel’s hedge funds to some investors, is seeking to have a civil fraud suit against his client dismissed.

In an Aug. 3 filing in circuit court in Sarasota County, Tampa attorney Edward O. Savitz claims that Rowe was not the ultimate cause of the investors’ losses: He did not sell or offer any securities and some of the plaintiff’s claims are barred because too much time has passed.

Sarasota attorney Drew Clayton is representing 11 investors in Nadel’s failed hedge funds and seeking damages of $5.4 million. All his clients were subscribers to one of the publications Rowe published from Sarasota: ”Wall Street Digest” or ”Carnegie Asset Management Inc. Reports.”

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Reuters – A brash Kuwaiti financier facing a fraud suit by U.S. authorities was found dead Sunday in an apparent suicide that sent shockwaves through the Gulf Arab financial sector.

A security source told Reuters that Hazem Al-Braikan appeared to have died from a single gunshot wound to the side of the head, while a policeman standing outside Braikan’s house said the well-connected financier, 37, had shot himself.

Braikan was the chief executive of Al Raya Investment, which is 10 percent owned by Citigroup Inc, and had been at the center of a financial scandal that erupted last week.

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New York (HedgeCo.Net) – A prestigious New York City lawyer has been arrested and charged with masterminding a $100 million real-estate scheme that targeted large institutional investors and hedge funds.

Marc Dreier, of Dreier LLP on Park Avenue, was arrested on Sunday at LaGuardia Airport and is now facing both federal charges of securities and wire fraud, along with civil fraud charges filed by the U.S. Securities and Exchange Commission. In addition, Dreier was already dealing with criminal impersonation charges brought on by Canadian authorities.

"Our complaint alleges a stunning, brazen fraud that targeted some very sophisticated institutional investors," said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.

Among the allegations, Dreier allegedly marketed bogus promissory notes that included ones tied to a real estate development company based in New York. Prosecutors said Dreier then covered it up by producing phony documentation and false financial statements to keep the investors from discovering the scheme.

According to the prosecution, Dreier convinced hedge funds to purchase these notes by highlighting the discount they would receive due to the original investors facing a cash crunch brought on by the current economic turmoil. Though the hedge funds weren’t specified, prosecutors say that one New York fund wired $100 million to one of Dreier’s accounts, while another fund in Connecticut wired about $13.5 million.

"This is a very complicated matter, and the facts are beyond reach of a sound bite," Dreier’s lawyer, Gerald Shargel told reporters at the scene.

Marc Dreier is a 58-year-old graduate of Harvard Law School. His bail hearing is scheduled for this Thursday.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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