Securities and Exchange Commission v. Nadel et al
Filing
987
MEMORANDUM in opposition re 979 Motion for Miscellaneous Relief filed by Richard Formica. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Barker, Chris)
EXHIBIT A
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" 'J ' ,
THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
------------------------------------ ---------------- X
Civil Action No.:
2:10:'cv-00921-PGS-ES
RICHARD FORMICA, MARILYNN
FORMICA, AMI MARIE FORMICA,
MATTHEW 'FRANCIS FORMICA, AND
KEVIN FRANCIS FORMICA,
AMENDED COMPLAINT
Plaintiffs,
JURY TRIAL DEMANDED
-against-
DONALD H. ROWE, THE WALL STREET
DIGEST INC., a Delaware corporation, and
CA~EGIE ASSET MANAGEMENT, INC.,
a Delaware corporation,
Defendants.
-----------------------------------------------------------X
Plaintiffs, by their attorneys, Sadis & Goldberg LLP ("Sadis & Goldberg"), for
. " . ; •. their complaint, allege upon infomiation and belief as follows:
NATURE OF THE ACTION
l.
Plaintiffs are and/or were at aU relevant times investors in the following hedge
funds: Scoop Real Estate, L.P.; Valhalla Investment Partners, L.P.; Victory IRA Fund, Ltd.;
Victory Fund, Ltd.; Viking IRA Fund, LLC; and Viking Fund LLC (collectively, the "Nadel
Funds"), which were managed by Arthur Nadel, Neil V. Moody, and Christopher D. Moody,
(collectively, "Nadel-Moody").
Plaintiffs were also investors in the following hedge funds:
Draseena Three Oaks Currency Fund, LLC; praseena Three Oaks Senior Strength Fund, LLC;
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Draseena Three Oaks Senior Strength Q Fund, LLC; Draseena Arrow Fund, LLC; Draseena
An-ow Fund II, LLC (collectively, the "Draseena Group"); High Street Futures Fund, LP; High
Street Global Futures Fund, LTD (collectively, the "High Street Funds"); The Carnegie Fund, LP
("The Carnegie Fund"); and The Wall Street Digest Fund, LP ("The Wall Street Digest Fund").
All of the funds mentioned in this paragraph collectively will hereinafter be referred to as the
"Recommended Hedge Funds".
2.
The Recommended Hedge Funds, through Defendant Donald Rowe ("Defendant
Rowe") and entities under his control (described more fully below), solicited investors located
throughout .the United States, including the State of New Jersey.
3.
This action stems from, inter alia, a common plan, scheme, and unlawful course of
conduct, pursuant to which Defendants knowingly or recklessly engaged in acts, transactions,
practices, and courses of business which operated as a fraud and deceit upon Plaintiffs. Defendant
Rowe: (1) made various deceptive and untrue statements of material fact as a representative of
Defendant Carnegie Asset Management, Inc. ("Defendant Carnegie"), and in The Wall Street
Digest, an investment newsletter he edited and published; and/or (2) omitted material facts as to
the purported merits of investing in the Recommended Hedge Funds and that he was receiving
compensation in the form of referral fees from the Recommended Hedge Funds.
4.
The purpose and effect of said scheme, plan, and unlawful course of conduct was,
among other things, to receive undisclosed referral fees by inducing Plaintiffs to invest in the
Recommended Hedge Funds, most of which are now defunct, causing Plaintiffs millions of
dollars of damages .
•
•
•
1 ...... •
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JURISDICTION AND VENUE
5.
The claims asserted herein arise, in part, pursuant to Sections 1O(b) of the
Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §78j(b), 78(r) and 78t(a) and
the rules and regulations promulgated thereunder by the Securities and Exchange Commission
("SEC"), including Rule lOb-5, 17 C.F.R §240.10b-5, and the common law.
6.
This Court has jurisdiction over the subject matter of this action pursuant to
Section 27 of the Exchange Act, 15 U.S.C. §78aa, and 28 U.S.C. §1331. The amount in question
in this matter exceeds $75,000.00.
7.
This Court also has jurisdiction over the subject matter of this action pursuant to
diversity of citizenship under 28 U.S.C 1332, as Plaintiffs are residents of this District, and none
of the Defendants are residents of the State of New Jersey, but reside in one or more states.
8.
This Court has personal jurisdiction over the Defendants in this action since: (a)
service was proper, as Defendants agreed to waive service, and authorized nationwide service
under Section 27 of the Exchange Act; and (b) Defendants reside and conduct business in the
'.
. .United States.
9.
Venue is proper in this District pursuant to Section 27 of the Exchange Act, as
Plaintiffs are residents in this District and many of the acts and practices complained of herein
occurred and continue to occur in substantial part in this District.
10.
Furthermore, venue is proper in this District, as Plaintiffs are residents in this
District and many of the acts and practices complained of herein occurred in substantial part in
this District.
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11.
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In connection with the acts, transactions and conduct alleged herein, Defendants,
directly and indirectly, used the means and instrumentalities of interstate commerce, including
the United States mails and interstate telephone communications.
12.
Mr. and Mrs. Formica maintain a small, family-owned psychiatric practice and,
as a result of the monetary losses incurred by investing in the Recommended Hedge Funds, have
been forced to come out ofretirement to support themselves and pay for their children's college
educations.
As explained in greater detail below, the Formica's business, and indeed the
Formicas themselves, would needlessly be burdened with further undue personal and economic
hardship and suffering if this Court does not exercise personal jurisdiction over the Defendants.
PARTIES
l3.
Plaintiff Richard Formica is an individual who, at all times relevant to this
proceeding, has resided in Haworth, New Jersey. Mr. Formica is the individual family member
who primarily dealt with Defendant Rowe. Mr. Formica is approaching 70 years of age and was
recently diagnosed with atrial fibrulation, a potentially life threatening condition that recently
caused him to suffer a heart attack and to be twice hospitalized.
14.
Plaintiff Marilyrlli Formica is· an individual who, at all times relevant to this
proceeding, has resided in Haworth, New Jersey.
15.
Plaintiff Ami Marie Formica is an individual who, at all times relevant to this
proceeding, has resided in Haworth, New Jersey.
16.
Plaintiff Matthew Francis Formica is an individual who, at all times relevant to
this proceeding, has resided in Haworth, New Jersey.
17.
Plaintiff Kevin Francis Formica is an individual who, at all times relevant to this
proceeding, has resided in Haworth, New Jersey.
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18.
Defendant Rowe is an individual who, to the best of Plaintiffs' knowledge, at all
times relevant to this proceeding, has resided in Sarasota County, Florida, and who founded The
Wall Street Digest, Inc. ("Defendant WSD"), as well as Defendant Carnegie and was, at all times
relevant to this proceeding, the president, a principal shareholder and controlling principal of
Defendant WSD and Defendant Carnegie. Defendant Rowe also was, at all times relevant to this
proceeding, the controlling principal of The Carnegie Fund and The Wall Street Digest Fund.
Despite the fact that Defendant Rowe referred to himself as "Wall Street's Most Widely Read
Investment Advisor [sic)", he was not a registered representative with a licensed broker-dealer,
nor was he ever registered as an investment adviser, as required under Federal and State
securities laws.
Moreover, as alleged in more detail below, Defendant Rowe and/or other
Defendants received, but never disclosed to Plaintiffs, referral fees from at least one of the
Recommended Hedge Funds in exchange for the Defendant Rowe's recommendations that
Plaintiffs invest therein, again in violation of Federal and State law.
19.
Defendant WSD, a Delaware corporation controlled by Defendant Rowe,
maintains principal offices in Sarasota, Florida. At all times relevant to this proceeding, it has
published an investment newsletter knoWn as The Wall Street Digest, which touts itself as "Wall
Street's most widely read investment newsletter" and "Wall Street's Most Widely Read
Investment Advisor [sic]". Upon information and belief, The Wall Street Digest had more than
. 2600 subscribers, approximately 100 of whom reside in the State of New Jersey. As alleged in
more detail below, touting of the Recommended Hedge Funds appeared in this newsletter and in
various marketing pieces prepared and distributed by Defendants on multiple occasions from
approximately 2000 until sometime in 2008. Moreover, as alleged in more detail below,
Defendant WSD and/or other Defendants received, but never disclosed to Plaintiffs, referral fees
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from at least one of the Reconunended Hedge Funds in exchange for the Defendant Rowe's
recommendations that Plaintiffs invest therein, again in violation of Federal and State law.
20.
Defendant Carnegie, a Delaware corporation controlled by Defendant Rowe,
maintains principal offices in Sarasota, Florida. At all times relevant to this proceeding,
Defendant Carnegie held itself out as an investment management company, which, upon
information and belief, served as manager of The Carnegie Fund and The Wall Street Digest
FWld. As alleged in more detail below, Defendant Carnegie andlor other Defendants received,
but never disclosed to Plaintiffs, referral fees from at least one of the Recommended Hedge
Funds in exchange for the Defendant Rowe's recommendations that Plaintiffs invest therein,
again in violation of Federal and State law.
21.
All representations made to Plaintiffs by Defendant Rowe, as detailed below,
were made by him while he was acting on behalf of, andlor within the scope of his employment
by Defendant WSD and Defendant Carnegie and, as such, are properly chargeable to Defendant
WSD and Defendant Carnegie under principal/agency theory, the doctrine of respondeat
superior, and applicable securities laws and regulations. Defendant Rowe, Defendant WSD, and
Defendant Carnegie are referred to collectively herein
22.
as "Defendants".
Defendants are each an "investment adviser" pursuant to the Investment Advisers
Act of 1940, 15 U.S.C. § 80b-2 (the "Advisers Act"), section (a)(11).
BACKGROUND FACTS
Over a Fifteen-Year Relationship, Defendant Rowe Became a Trusted Adviser to Plaintiffs
23.
In or around 1994, Plaintiff Richard F01mica subscribed to Defendant Rowe's
investment newsletter The Wall Street Digest. Plaintiff Richard Formica and Defendant Rowe
developed a close, adviser-advisee relationship over the next 15 years, frequently speaking over
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the telephone regarding investing. These calls were initiated by both parties with Defendant
Rowe frequently calling Plaintiff Richard Formica and advising him on investments in the
Recommended Hedge Funds.
Plaintiff Richard Formica recalls several instances wherein
Defendant Rowe called him directly in the State of New Jersey and Plaintiffs frequently received
from Defendant Rowe, his employees and/or Defendants personally addressed correspondence
and other materials relating to, inter alia, their investments in The Carnegie Fund and The Wall
Street Digest Fund, which are investment funds controlled and
manag~d
by Defendant Rowe.
See Exhibit A.
24.
As discussed more fully below, Plaintiffs, through their father Richard, came to
rely on Defendant Rowe's guidance and advice, as demonstrated by Plaintiffs investing millions
of dollars
with multiple~· investment managers
in reliance upon Defendant Rowe's
recommendations. Plaintiffs' trust and reliance is further demonstrated by the fact that upon
Defendant Rowe's urging, they purchased securities in two limited partnerships that were
directly controlled by Defendant Rowe, namely The Carnegie Fund and The Wall Street Digest
Fund.
25.
Plaintiffs' clear reliance on Defendant Rowe's advice, coupled with Defendant
Rowe holding himself out as an expert, providing investment advice, and receiving
compensation, albeit undisclosed, for his referrals, established Defendant Rowe as a fiduciary to
Plaintiffs.
The Draseena Group (1996 - 2010)
26.
Beginning in 1996, Defendant Rowe recommended to Plaintiffs that they invest in
the Draseena Group. For the next 14 years, until September 1, 2008, Plaintiffs relied on
Defendant Rowe's recommendations as to which money managers they should invest with and,
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as a result, invested a total of approximately $5,849,121.00 in the five Draseena Group funds
mentioned above. A complete list of the amounts and dates of each investment made by
~laintiffs
in the Draseena Group funds is attached hereto as Exhibit B and is incorporated by
reference herein.
27.
To date, despite numerous attempts and extreme mental anguish, Plaintiffs still
-are attempting to recover in excess of$1,740,000.00 owed to them by the Draseena Group.
28.
The Draseeria Group currently is under investigation by the SEC and the United
States Treasury Department. Furthennore, at least one, if not all, of the Draseena Group funds
currently are in liquidation and possibly receivership.
29.
In violation of his fiduciary duties, relevant Advisers Act rules, and certain
Federal and State securities laws, Defendant Rowe failed to perform adequate due diligence with
regard to the Draseena Group.
Had he performed any honest and adequate due diligence,
Defendant Rowe would have discovered that: (1) no independent audit was ever performed on
the Draseena Group; (2) its managing members were being investigated by the SEC; and (3)
Daniel Spitzer, a managing member of the Draseena Group, had been required to surrender his
license to the National Futures Association in 1992.
In the alternative, if Defendant Rowe·
discovered these facts and failed to disclose them, he also would be in violation of his fiduciary
duties, relevant Advisers Act rules, and ce11ain Federal and State securities laws.
30.
In addition, Defendant Rowe never disclosed, either verbally or in writing as
required under mmlerous laws, to Plaintiffs that he was receiving referral fees from the Draseena
Group.
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The Nadel Funds (2001 - 2009)
31.
Beginning in 2001, Defendant Rowe recommended to.Plaintiffs that they invest in
the Nadel Funds. For the next 8 years, Plaintiffs relied on Defendant Rowe's recommendations
as to which money managers they should invest with and, as a result, lost approximately
$3,893,535.00 in the Nadel Funds. A complete list of the amounts and dates of each investment
made by Plaintiffs in the Nadel Funds is attached hereto as Exhibit C and is incorporated by
reference herein.
32.
The Nadel Funds raised more than $350,000,000.00 from investors, including
Plaintiffs herein, between approximately 2000·and 2009.
33.
Between approximately 2000 and 2006, Nadel-Moody formed the Nadel Funds,
which were investment pools, targeted to investors located throughout the United States,
including New Jersey.
34.
Defendant Rowe promoted Nadel-Moody in various publications as "America's
Top Ranked Money Manager" and also used other similarly positive descriptions from
approximately 2000 through sometime in 2004. Exhibits D, E and F are examples of three such
publications and are incorporated by reference herein.
35.
From approximately 2000 through sometime in 2004 and specifically in the
second quarter of 2003, Defendant Rowe represented in The Wall Street Digest, and in other
materials, that he had personally conducted a "due diligence visit to the offices of Nadel &
Moody," and stated in relevant part as follows (emphasis added):
Did Your Money Manager Return
21.7% in 2002
19.8% in 2001
55.1 % in 2000
After last year's market disaster (S&P 500 -23:3%), would you be happy with a
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- 21.7% return in 2002, a 19.8% return in 2001 (S&P 500 -13%), or a 55.1% return on
your equity investments for the year 2000 (S&P 500 40.1 %)? WouLd you be happy
with a 90.7% return in 1998 and 87.8% in 1999?
These are the actual results achieved by an effective team of managers in
Sarasota, Florida. After 39 years on Wall Street, Neil Moody left the Street to form
an association with Arthur Nadel and his group to manage equity funds. The
Nadel Group had enjoyed unusual success with private investment groups, testing a
technical trading system. that interacts with fundamentals to produce results that
consistently outperform the market averages.
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.
What I did learn is very important for the individual investor. After 26
years of reviewing the track records of over 11,000 mutual funds, 6,000 money
managers and 5,800 hedge funds, Nadel's computerized investment program has
produced the best track record and most consistent returns I have ever seen.
His proprietary program, combined with screening for stock fundamentals,
has consistently produced a profit mOilth after month in both up and down
markets. The highly technical program used by the group is proprietary, but I
was given an opportunity to see it in action during a due diligence visit to their
office.
A large group of computer monitors display market data continuously,
reviewing and digesting current market movements and comparing them to previous
data. Immediate newswire flashes are intermingled with muted "talking heads" on
CNBC. Equity positions are adjusted, long and short, by means of instant-response
trading programs.
Nadel & Moody offer private investment programs for pension plans and
wealthy individuals, which are organized and administered by Moody. Not
surprisingly, they do not advertise. Each investmen~ program is set up as a limited
partnership which is limited to only 99 investors. Each program is currently accepting
only accredited investors.
36.
The statements above are misleading because if Defendant Rowe performed any
meaningful or adequate due diligence, he would have discovered that the Nadel Funds' purported
track record was a complete fraud. Defendant Rowe clearly never verified his statement that
Nadel-Moody were using "a computerized investment program to produce the best track record
and most consistent returns he had ever seen" because had he perfOlmed adequate due diligence, he
would have uncovered that Nadel-Moody were not trading any securities whatsoever.
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37.
Document 22 Filed 06/24/10 Page 11 of 62 PagelD 356
Furthermore, Defendant Rowe's statements are misleading because an adequate
amount of honest due diligence would have uncovered that Arthur Nadel had been disbarred in
1980s, the Nadel's Funds had never been audited, and the Nadel Funds' accountant had lost his
license to practice as a Certified Public Accountant ("CPA").
38.
Plaintiffs either received the representations contained in Paragraphs 29 - 30
herein or representations to that effect in writing, such as those in and Exhibits D, E and F
attached hereto, and, in many instances, verbal communications from Defendant Rowe, and
Plaintiffs reasonably relied on recommendations made by "Wall Street's most widely read
investment advisor [sic1".
39.
Plaintiffs paid monthly subscription fees to receive The Wall Street Digest.
40.
Unbeknownst to the Plaintiffs, Defendant Rowe was paid referral fees by the
Nadel Funds in exchange for acting as an intelmediary and for referring investors, including
Plaintiffs, to those hedge funds and for advertising Nadel-Moody in The Wall Street Digest as
"America's Top-Ranked Money Manager".
41.
Despite being investment advisers under the Advisers Act and stating as much,
none of Defendants were ever registered as such.
42.
As a direct result of recommendations made by Defendant Rowe, Plaintiffs
bought limited partnership interests (the "LP Interests") in the Nadel Funds. The LP Interests
constitute a "Security" under the Advisers Act, section (a)(18) and other applicable Federal and
State statutes.
Nadel-Moody is Exposed as a Fraud in 2009
43.
In mid-January 2009, Arthur Nadel fled the State of Florida. Shortly thereafter,
his business partners, . Neil Moody and Christopher Moody, advised investors, including
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Plaintiffs herein, that not only had Arthur Nadel abandoned the Nadel Funds under highly
suspicious circumstances, but also that essentially all of the investors' money was gone.
44.
On January 21, 2009, the SEC filed a lawsuit in the district court for the Middle
District of Florida, styled Securities and Exchange Commission v. Arthur Nade}, Scoop Capital,
LLC and Scoop Management, Inc., Case No. 8:09-cv-87-T-26TBM (the "SEC Proceeding").
45.
As a result of the SEC Proceeding, a federal judge froze Arthur Nadel's assets and
appointed a receiver to examine the books and records of the Nadel Ftmds. The receiver's
examination revealed that the alleged investment returns of the Nadel Funds had been "massively
overstated" for several years, including the time period when Defendant Rowe was promoting the
Nadel Funds, and confirmed that there was virtually no money remaining in the various hedge
fund accounts.
46.
At or about the time the receivership was established, the following facts were
uncovered:
•
Arthur Nadel had been disbarred as an attorney in the State of New York in the early
1980s for improper use of clients' escrow funds;
•
none of the Nadel Funds had audited financial statements;
•
the accountant for the Nadel Funds had lost his license to practice as a CPA in Florida;
and
•
investors in the Nadel Funds had paid Nadel-Moody extraordinary fees, which totaled
more than $90,000,000.00 by the time this fraud was discovered.
47.
None of these material facts, each
of which could have been easily discovered by
any reasonable and competent "due diligence" examination, were disclosed by Defendant Rowe at
the time he was recommending that Plaintiffs invest in the Nadel Funds.
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48.
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Defendant Rowe never advised any of the investors, including Plaintiffs herein,
that he was no longer recommending the Nadel Funds, and that he was withdrawing his own
investments from the Nadel Funds.
The Relationship Between Defendant Rowe and Nadel-Moody and the Nadel Funds
49.
According to Arthur Nadel, Nadel-Moody and Defendant Rowe had a verbal,
handshake agreement that entitled Defendant Rowe to a certain percentage of the management
and success fees that the Nadel Funds charged Plaintiffs for managing their money. According
to Arthur Nadel, this arrangement resulted in Defendant Rowe earning approximately
$10,000,000.00 for referring Plaintiffs to the Nadel Funds.
50.
According to Arthur Nadel, sometime in late 2007 to early 2008, the
relationship between Defendant Rowe and Nadel-Moody soured because Nadel-Moody ceased
paying Defendant Rowe referral fees per their verbal, handshake agreement.
51.
In late 2007 to early 2008, at the same time that Nadel-Moody ceased paying
Defendant Rowe referral fees, Defendant Rowe began to speak negatively about Arthur Nadel
to Plaintiffs and started touting the Carnegie Fund (discussed more fully below).
High Street Capital Management (2006 - 2008)
52.
In April of 2006, Defendant Rowe, through The Wall Street Digest and on
personal telephone calls that were initiated by both Plaintiffs and Defendants, began touting High
Street Capital Management, LLC ("High Street"), which was located in Tampa, Florida, not 45
miles from Defendant Rowe's hometown, and which was run by John Bartoletta ("Bartoletta").
In the April 2006 edition of The Wall Stree1 Digest, Defendant Rowe stated, in relevant part, as
follows:
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High Street™ Capital Management - Up 105% in 2005
Up 23% in January 2006; Up 18% in February 2006;
And Up 7.5% in March 2006
Dear Investor:
These are the actual results achieved by a skillful group of traders
led by John Bartoletta, owner and founder of High Street Capital
Management. "
In the past 30 years, I have only found two money managers who
could make money during both bull markets and bear markets. Both are
successful because they are traders who manage the risk, as opposed to
money managers who manage the money.
They are very skillful traders, with enormous technical skills and
the ability to go long or short in any market by utilizing equities, options,
futures and commodities.
By using enormous technical skills and the ability to go long or
short simultaneously in any market, Bartoletta and his group of traders
were able to capture a 105 percent return for clients in 2005, compared to
"the S&P 500, which was up only 5 percent at year-end, and the CRB
Commodities Index, which was up only 10 percent for all 0[2005.
After years of research, Bartoletta launched his Dynamic Style
Rotation® approach to trading on October 1,2004, and captured an 18.95
percent profit for clients in the fourth quarter of 2004. A profit of 105
percent followed in 2005. January 2006 was up 23.3 percent; February was
up 18 percent; and March was up 7.5 percent. All figures are gross of fees.
At 42, Bartoletta and his team of five traders have consistently
produced solid returns. On most days, the team at High Street is in an allcash position by the closing bell, reducing risk and avoiding unforeseen
market and geo-political events. The team is completely focused on
protecting client assets at all times.
Any movement, up or down, in any market presents a profit
opportunity for Jolm Bartoletta's quantitative investment approach on a
short-term and long-term basis.
During a bull market, Bartoletta's Dynamic Style Rotation®
trading program generates a larger weighting in long positions from the
best "upside" opportunities, and a smaller weighting in short positions
from the best "downside" opportunities.
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During a bear market, the process is reversed by overweighting
short positions, while underweighting long positions. Keep in mind that
the stock market, the bond market, the futw-es markets and the
commodities markets are all moving in different directions every day.
Consequently, Bartoletta's group of traders are able to
simultaneously take advantage of opportunities in both long positions and
short positions in virtually any ma:ket that is moving either up or down.
I have been tracking the performance of 8,000 money managers
and 7,000 hedge ftmd managers for almost 30 years. Year-after-year, over
95 percent of all money managers either lose money or they consistently
underperform the market.
*****
Sadly, most will watch their bull market gains disappear.
Bartoletta's Dynamic Style Rotation® trading approach to all four
investment markets simultaneously has convinced me that you can avoid
that disaster and continue to increase your profits.
*****
Sadly, over 95 percent of the money managers do not have any
shorting skills and will, unfortunately, give back their bull market gains.
John Bartoletta's ability to short the weakest markets, while
simultaneously going long in the strongest markets produced a 105 percent
gain in 2005, while the stock market (up only 5 percent) churned
continuously up and down as the Federal Reserve raised interest rates.
There is an enormous investment opportunity directly ahead.
Subscribers of The Wall Street Digest are aware of the 2006-2010 bull
market ahead. This will not be just another bull market!
*****
I have highlighted High Street because it is frustrating to see such
great opportunities and know that many of you are not hearing about such
managers. Everyday, I am asked by subscribers and clients, "What should
I do with my money?"
Over the next five years, I will be offering my clients a variety of
programs to help them build the kind of wealth they will need to see them
through what could be a long, difficult economic contraction beginning in
2010.
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. An investment fund that would allow you to simultaneously take
advantage of the daily long and short oscillations of the stock market, the
bond market, the currency market and the commodities market would be
the ideal investment.
Anywhere on Wall Street, you would have to invest in four
different investment funds-an equities fund, a bond fund, a currency fund
and a commodities fund-and then hope that you are in the right fund at
the right time.
John Bartoletta's investment philosophy is: "There is always a bull
market somewhere. Let's take advantage of it. There is always a bear
market somewhere. Let's short it."
Bartoletta formed two companies, High Street Capital Management
and High Street Financial Management, which enables his firm to offer
clients a complete menu of varied investment programs.
Investment programs are open to pension funds, 401 K and IRA
funds. Private investment programs are available for wealthy individuals.
Investment programs can also be tailored to meet your special needs. At
High Street, you are both the client and the CEO of your money.
While past perfOlmance is no guarantee of future results, keep in
mind that a consistent annual return of 26 percent will double your money
every three years.
53.
On May 18,2006, in reliance upon Defendant Rowe's recommendation, Plaintiffs
invested $250,000.00 in the High Street Futures Fund, LP ("High Street Futures Fund").
54.
Then for several months, until October 1, 2006, in reliance upon Defendant
Rowe's recommendation, Plaintiffs periodically committed an additional $1,200,000.00 in the
High Street Futures Fund, for an aggregate investment of$1,450,000.00.
55.
Upon information and belief, Defendant Rowe and High Street had a verbal,
handshake agreement that entitled Defendant Rowe to a certain percentage of the management
and success fees that the High Street Funds charged Plaintiffs for managing their money
(described more fully below).
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56.
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Upon information and belief, sometime in late 2007, the relationship between
Defendant Rowe and High Street soured because High Street ceased paying Defendant Rowe
referral fees per their verbal, handshake agreement.
57.
In late 2007, at the same time that High Street ceased paying Defendant Rowe
referral fees, Defendant Rowe began to speak negatively about High Street and Bartoletta.
58.
On August 31, 2007 and December 31, 2007, in reliance upon Defendant Rowe's
recommendation and Defendant Rowe's verbal statements to Plaintiffs that he had "lost all faith
in Bartoletta's competence", Plaintiffs redeemed $711,239.00 from the High Street Futures Fund
and invested that sum in the Nadel-Moody ponzi scheme for a total loss (discussed more fully
above). The remaining $488,761.00 was completely lost by High Street.
59.
Upon information and belief, Defendant Rowe recommended that Plaintiffs
invest these redeemed monies in the Nadel Funds, even though the relationship between
Defendant Rowe and Nadel-Moody was souring, so that Nadel-Moody would allow Defendant
Rowe to withdraw his own capital from the Nadel Funds.
60.
On July 1, 2006 and August 1, 2006, in reliance upon Defendant Rowe's
recommendation, Plaintiffs invested a total of $500,000.00 in the High Street Global Futures
Fund, LTD ("High Street Global Futures Fund").
61.
On October 31, 2007, in reliance upon Defendant Rowe's recommendation,
Plaintiffs redeemed $100,000.00 from the High Street Global Futures Fund and invested that
sum in the Draseena Group. As previously stated, Plaintiffs are still attempting to recover in
excess of$I,740,000.00 owed to them by the Draseena Group.
62.
Toward the end of 2007, Plaintiffs were able to redeem and retain approximately
$222,862.00 before losing the entire remainder of their invested capital, or $815,899.00 in the
17
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24110 Page 18 of 62 PagelD 363
aggregate, in a money manager touted by Defendant Rowe "who could make money during both
bull markets and bear markets", namely John Bartoletta.
63.
Defendant Rowe repeatedly contended that he had spent an "entire week
performing due diligence on Mr. Bartoletta, aUditing his returns, observing and questioning his
methodologies, and examining his 21 st century, highly sophisticated trading room with a team of
experienced traders surrounded by live feeds providing data and analysis on every imaginable
market".
64.
In violation of his fiduciary duties, relevant Advisers Act rules, and certain
Federal and State securities laws, Defendant Rowe failed to perfonn honest and adequate due
diligence and never disclosed, either verbally or in writing as required under numerous laws, to
Plaintiffs that he was receiving referral fees from High Street. Had he performed any honest and
adequate due diligence, Defendant Rowe would have discovered that no independent audit was
ever performed on the High Street Funds and that the High Street Funds traded in a manner that
comptetely belied and contradicted written representations regarding its investment strategy. If
Rowe discovered these facts and failed to disclose them, he also would be in violation of his
fiduciary duties, relevant Advisers Act rules, and certain Federal and State securities laws.
The Relationship Between Defendant Rowe and High Street
65.
Upon information and belief, Defendant Rowe and High Street had a verbal,
handshake agreement that entitled Defendant Rowe to a certain percentage of the management
and success fees that the High Street Funds charged Plaintiffs for managing their money. This
arrangement resulted in Defendant Rowe earning millions for referring Plaintiffs to the High
Street Funds.
18
Case 8:11-cv-00516-MSS-EAJ
66.
Document 22 Filed 06/24110 Page 19 of 62 PagelD 364
Upon information and belief, sometime in late 2007, the relationship between
Defendant Rowe and High Street soured
bec~use
High Street ceased paying Defendant Rowe
referral fees per their verbal, handshake agreement.
67.
In late 2007, at the same time that High Street ceased paying Defendant Rowe
referral fees, Defendant Rowe began to speak negatively about High Street and Bartoletta, and
began touting the Carnegie Fund (discussed more fully below).
The Feeder Funds
68.
Following the falling out with Nadel-Moody .and Bartoletta, Defendant Rowe
ceased relying on verbal, handshake agreements with money managers and began touting legally
formed structures called "feeder funds". A feeder fund is a hedge fund which invests solely
through another fund, known as the master fund. Shares are sold to investors through the feeder
fund, but the capital is invested through the master fund. This structure afforded Defendant
Rowe a mechanism to guarantee that he would receive referral fees from the money managers
with whom he invested because legally binding contracts and banking relationships existed
between the feeder funds and the master funds.
69.
The feeder funds Defendant Rowe touted were The Carnegie Fund and The Wall
Street Digest Fund (Collectively, "The Feeder Funds"), both of which are controlled by
Defendants. Under the New Jersey Uniform Securities Law, and relevant SEC and FINRA rules,
The Feeder Funds, The Feeder Funds' LP Interests, and Defendant Rowe should have been, but
were not, registered with the New Jersey Bureau of Securities.
70.
Upon infonnation and belief, Defendant Rowe sold LP Interests in The Feeder
Funds and served as investment adviser to numerous residents of New Jersey in relation to The
Feeder Funds.
19
Case 8:11-cv-00516-MSS-EAJ Document 22
71.
Filed 06/24/10 Page 20 of 62 PagelD 365
The act of selling securities to residents of the State of New Jersey, including
Plaintiffs, demonstrates that Defendant Rowe purposefully availed himself of the benefits and
protections of the securities laws of New Jersey, thereby establishing sufficient minimum
contacts for this Court to exercise personal jurisdiction over Defendants.
72.
Moreover, Defendant Rowe's contacts with New Jersey have been continuous,
systematic and substantial, as he served as a self-admitted "investment advisor [sic]", albeit
unregistered, to Plaintiffs for in excess of 15 years and sold securities in the fonn of LP Interests
to Plaintiffs in The Feeder Funds. This business partnership continues to this day (as described
more fully below).
73.
Since Defendant Rowe served as an investment adviser to Plaintiffs, received
undisclosed referral fees and directly sold them securities in entities under his express control,
Defendant Rowe should reasonably anticipate being haled into this Court.
74.
By exercising jurisdiction over Defendants, this Court will fulfill its fundamental,
substantive social policy of protecting the monetary and other interests of Plaintiffs.
The Carnegie Fund (Late 2007 - 2009)
75.
Following his fallouts with Nadel and Bartoletta and during mid-to-Iate 2007,
Defendant Rowe began touting to Plaintiffs The Carnegie Fund both in The Wall Street Digest
and verbally, stating, in relevant part, as follows:
DIVERSIFICATION AMONG THE TOP 100 MONEY MANAGER'S
WITH NO PORTFOLIO LOSSES CAN BUILD YOUR WEALTH AND
PEACE OF MIND
Over 100 money managers with no portfolio losses are ready to
manage your money. But I wouldn't hire just two or three. Hiring all of
them is the best strategy to reduce risk and it will be remarkably simple
and cost effective to you ...
The source of these money managers is multiple databases of over
20
Case 8:11-cv-00516-MSS-EAJ
Document 22
Filed 06/24/10
Page 21 of 62 PagelD 366
16,000 U.S. money managers which I downloaded into my database. I
rank them monthly from best to worst and focus on money managers in the
top one percentile with no portfolio losses ...
*****
Sophisticated strategies that are able to capture profits from price
imbalances in the stock and bond markets are unusually successful
because market imbalances are always present (i.e. prices that are either
too high or too low). Ph.D. mathematicians and computer science
"Quants" skillfully exploit these daily market imbalances while reducing
exposure to losses ...
.
I am constantly adding money managers to our main in-house
database. But our focus is always on the managers with no losses on a
quarterly and annual basis. Screening managers for the best monthly
performance and reduced risk is a daily process. It is the best strategy,
perhaps the best insurance policy I have found to insure a consistent profit
for you and me, quarter after quarter, year after year . ..
76.
Defendant
Rowe
also
touted,
both
verbally
and
in personal,
written
conespondence, including The Wall Street Digest, the track records of money managers with
whom The Carnegie Fund purportedly invested. He stated annual returns in, relevant part, as
foHows:
Money
Mana2er
A
B
C
D
E
F
77.
1999
2000
2001
2002
2003
2004
2005
--
2006
2007
540.2
56.1
126.7
35.6
39.7
13.2
31.6
23.1
13.5
22.0
23.7
12.3
15.3
347.4
24.6
26.6
10.9
12.0
51.2
12.2
20.2
18.6
12.9
12.6
16.9
22.3
31.9
9.5
18.9
14.1
19.3
12.0
9.7
13.3
12.6
9.1
22.5
9.S
13.3
On November 1, 2007, in reliance upon Defendant Rowe's recommendation,
Plaintiffs invested $200,000.00 in The Carnegie Fund.
78.
On February 1, 2008, in reliance upon Defendant Rowe's recommendation,
Plaintiffs invested an additional $390,000.00 in The Carnegie Fund.
21
Case 8:11-cv-00516-MSS-EAJ
79.
Document 22 Filed 06/24/10 Page 22 of 62 PagelD 367
Defendant Rowe never maintained a database of over 16,000 money managers as
he claimed to have in Exhibits D, E and F, and, in contradiction to statements, both written and
verbal, he failed to perform any honest and adequate due diligence in violation of his fiduciary
duties, relevant Advisers Act rules, and certain Federal and State securities laws.
80.
Upon information and belief, in contrast to his written representations in Exhibit
G, Defendant Rowe never invested Plaintiffs' money with "100 money managers".
81.
Over the next year and half, Plaintiffs redeemed $497,000.00 from The Carnegie
82.
Plaintiffs have attempted numerous times to redeem the remaining $93,000.00
Fund.
they invested in The Carnegie Fund. In fact, Defendant Rowe claims that due to a complete
write-off associated with one of the underlying managers, who he claimed had "no portfolio
losses", Plaintiffs now owe Defendant Rowe in excess of$8,000.00.
The Wall Street Digest Fund (Late 2008 - 2009)
83.
During late 2007, Defendant Rowe began touting to Plaintiffs The Wall Street
Digest Fund both in The Wall Street Digest and verbally, stating, in relevant part, as follows:
YOU CAN HIRE THIS MONEY MANAGER TODAY
Year
2008
2007
2006
2005
2004
2003
2002
2001
2000
Gain
40.57%
44.64%
47.70%
78.86%
69.60%
89.11%
49.13%
86.57%
72.85%
22
S&P 500
-11.4%
5.5%
15.8%
4.9%
10.9%
28.7%
-22.1%
-11.9%
-9.1%
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 23 of 62 PagelD 368
The most significant thing about the audited track record shown
above is the impressive profits that were captured during down, difficult
markets. You can immediately appreciate the 40.57 percent gain tlu-ough
August 31, 2008, while the S&P 500 was down 11.4 percent. A 44.64
percent gain during 2007, when the S&P 500 was up only 5.5. percent,
should also capture your attention .. .
*****
My personal money manager produced the track record shown above ...
*****
My portfolio manager is the most gifted short-seller I biow. He
can short a bun market and produce impressive gains . ..
84.
Upon information and belief, despite stating as otherwise, Capital Trading
Partners, which was the money manager Defendant Rowe referred to in the quotation in
Paragraph 74, was never Defendant Rowe's "personal money manager".
85.
On November 1, 2008, Plaintiffs invested $100,000.00, in The Wall Street Digest
Fund in reliance upon Defendant Rowe' s re~ommendation.
86.
Following a report from Defendant Rowe that they earned 5% during November
2008 and upon Defendant Rowe's urging, Plaintiffs invested an additional $50,000.00 in The
Wall Street Digest Fund on January 1,2009.
87.
On March 19,2009, Plaintiffs received a written correspondence from Defendant
Rowe stating that the previously reported track record for November and December was wrong
and had to be revised downward. This correspondence stated, in relevant part, as follows:
The Wall Street Digest Fund, L.P.
8584 S. Tamiami Trail Suite 110 Sarasota, FL 34238
March 19,h 2009
RE: Your The Wail Street Digest Fund, L.P. account -- November 2008 report
23
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 24 of 62 PagelD 369
Dear Investors, Partners, and Friends,
I am writing to update you on The Wall Street Digest Fund, L.P. We have
reported the investor statement delays as a result of implementing a new
administrator for Capital Trading Partners, the Wall Street Digest Fund's
hired Trading Advisor ...
*****
Unfortunately the estimate reported by the trader was incorrect. . .
*****
The adjustment for November is from +5.3 percent to +0.51 percent. The
reported estimate for December 2008, is also reduced ...
*****
Our Operations Officer, Michael Corcione will call you to explain these
details ...
*****
I apologize for this error. ..
88.
Defendant Rowe never maintained a database of over 16,000 money managers
and, in contradiction to statements, both written and verbal, he failed to perform any honest and
adequate due diligence in violation of his fiduciary duties, relevant Advisers Act rules, and
certain Federal and State securities laws.
89.
On April 7, 2009, in a last-ditch effort to recover some of their savings, Plaintiffs
were able to redeem $140,000.00. Defendant Rowe still owes Plaintiffs $7,000.00.
COUNT I
Violation of Section 1O(b) of the Exchange Act
and SEC Rule lOb-S Thereunder
(Against all Defendants)
90.
Plaintiffs incorporate by reference all prior paragraphs of this Complaint as
though fully set forth herein.
24
Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 25 of 62 PagelD 370
9l.
This Count is asserted against Defendants and is based upon Section lOeb) of the
Exchange Act, 15
U.~.C.
§78j(b), and SEC Rule lOb-5 promulgated thereunder, 17 C.F.R.
§240.lOb-5.
92.
Defendants directly engaged in a common plan, scheme, and unlawful course of
conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices,
and
~ourses
of business which operated as a fraud and deceit upon Plaintiffs, and made various
deceptive and untrue statements of material facts and omitted to state material facts in order to
make the statements made, in light of the circumstances under which they were made, not
misleading to Plaintiffs. The purpose and effect of said scheme, plan, and unlawful course of
conduct was, among other things, to induce Plaintiffs to invest in the Recommended Hedge
Funds.
93.
Defendants, pursuant to said scheme, plan, and unlawful course of conduct,
knowingly or recklessly issued, caused to be issued, participated in the issuance of, the
preparation and issuance of decepti ve and materially false and misleading statements to Plaintiffs
'as particularized above.
94.
Plaintiffs relied, to their detriment, on the integrity of Defendants statements and
representations. If Plaintiffs had known the truth, they would not have invested in the
Recommended Hedge Funds.
95.
Defendants claimed on numerous occasions that he had "been tracking the
perfOlmance of 8,000 money managers and 7,000 hedge fund managers for almost 30 years".
On other occasions, Defendants claimed to have reviewed more than 22,800 mutual funds,
money managers and hedge funds.
See Exhibit D. In referring to High Street and 'Nadel-
Moody, both of which lost millions of dollars of Plaintiffs money, Defendants claimed on
25
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 26 of 62 PagelD 371
multiple occasions that, "In the past 30 years, I have only found two money managers who could
make money during both bull markets and bear markets. Both are successful because they are
traders who manage the risk, as opposed to money managers who manage the money". For a
man who purportedly reviewed more ~han 22,800 global funds, the managers of the Nadel Funds,
the High Street Funds funds, The Carnegie Fund, and the Wall Street Digest Fund were
conveniently located in or near Defendant Rowe's hometown of Sarasota, Florida, not in global
financial centers such as New York or London. The geographic proximity and failure to disclose
that he was receiving referral fees establishes motive and opportunity for Defendants to commit
breaches of fiduciary duties, relevant Advisers Act rules, and certain Federal and State securities
laws, including fraud.
96.
Plaintiffs have suffered substantial damages as a result of the wrongs herein
alleged in an amount to be proved at triaL
97.
By reason of the foregoing, Defendants directly violated Section 1OCb) of the
Exchange Act and Rule lOb-5 promUlgated thereunder in that they: (a) employed devices,
schemes, and artifices to defraud; (b) made untrue statements of material facts or omitted to state
material facts in order to make the statementS made, in light of the circumstances under which
they were made, not misleading; or (c) engaged in acts, practices, and a course of business which
operated as a fraud and deceit upon Plaintiffs in connection with their investments in the
Recommended Hedge Funds.
98.
WHEREFORE, Plaintiffs demand judgment for damages, interest, prejudgment
interest, attorneys' fees and costs, and for such other and further relief that this Court deems
appropriate.
26
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 27 of 62 PagelD 372
COUNT II
Common Law Fraud
(Against all Defendants)
99.
Plaintiffs incorporate by reference all prior paragraphs of this Complaint as
though fully set forth herein.
100.
Defendant Rowe, acting alone and in concert wi.th Defendant WSD and
Defendant Carnegie, made intentional misrepresentations of material fact and/or made
misrepresentations to Plaintiffs in a reckless manner, as more particularly detailed above,
without regard to the truth or falsity of those statements.
101.
In fact, the evidence in this case will show that the Recommended Hedge Funds
did not achieve the investment results touted by Defendants and that Defendant Rowe never
engaged in any honest andlor actual <'due
dilige~ce"
regarding the Recommended Hedge
Funds.
102.
Defendants made the above-referenced misrepresentations and intended for
Plaintiffs to rely upon them.
103.
Defendants held themselves out to Plaintiffs as knowledgeable and experienced
ipvestment advisers.
104.
Therefore, Plaintiffs reasonably relied on Defendants' assertions that the
Recommended Hedge Funds' track records were superior to those of thousands of other money
managers purportedly examined by Defendants.
105.
As a result of their reliance on the above-referenced misrepresentations,
Plaintiffs invested millions of dollars in the Recommended Hedge Funds.
106.
As a direct and proximate result of Defendants' misrepresentations, Plaintiffs
have suffered millions of dollars in damages.
27
Case 8:11-cv-00516-MSS-EAJ
107.
Document 22 Filed 06/24/10 Page 28 of 62 PagelD 373
WHEREFORE, Plaintiffs demand judgment against Defendants, jointly and
severally, for damages, costs, and such further relief as the Court deems just and equitable.
COUNT III
Negligent Misrepresentation
(Against all Defendants)
108.
Plaintiffs incorporate by reference all prior paragraphs of this Complaint as
though fully set forth herein.
109.
Defendants negligently misrepresented that they had conducted due diligence on
the Recommended Hedge Funds when, in fact, they had not.
110.
Defendants had a duty to use reasonable care when providing investment advice
and information to Plaintiffs. Defendants also had a duty to disclose the fact that they were
receiving referral fees from the Recommended Hedge Funds.
111.
Plaintiffs reasonably, justifiably, and materially relied upon the expectation that
Defendants had conducted the due diligence that they said they,had.
112.
Plaintiffs would not have invested their capital in the Recommended Hedge
Funds had Plaintiffs known that Defendants had not in fact conducted due diligence and had not
acted with reasonable care and reasonable diligence.
113.
Defendants breached their duty to Plaintiffs by failing to investigate, confirm,
prepare, and review with reasonable care the information contained in The Wall Street Digest
and by failing to disclose to Plaintiffs, among other things, the facts alleged above; and in failing
to correct the misstatements, omissions, and inaccuracies contained therein.
114.
As a direct, proximate and foreseeable result of pefendants' negligence,
Plaintiffs lost the entirety of their capital accounts and thereby suffered damages in an amount to
28
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 29 of 62 PagelD 374
be detennined at trial.
115.
Plaintiffs have no adequate remedy at law.
116.
WHEREFORE, Plaintiffs demand judgment for damages, interest, prejudgment
interest, attorneys' fees and costs, and for such other and further relief that this Court deems
appropriate.
COUNT IV
NEGLIGENCE
(Against all Defendants)
117.
Plaintiffs incorporate by reference all prior paragraphs of this Complaint as
though fully set forth herein.
118.
Defendants had during the relevant period a duty to use due care and protect
Plaintiffs from injury, which included, among other things, a duty to verify and adequately
ensure the truthfulness and accuracy of the statements they made, as well as to refrain from
disseminating false and misleading statements.
119.
Defendants breached the duty of care owed to their readers, customers, and
subscribers, including Plaintiffs.
120.
Defendants' breaches of duty were the proximate cause of Plaintiffs' injuries
because Defendants' breaches were a substantial factor in bringing about the injuries suffered
by Plaintiffs. As a result of Defendants' negligent conduct, Plaintiffs were damaged. Plaintiffs
reasonably relied on what turned out to be false information concerning the investments they
made in the Recommended Hedge Funds and have been damaged as a result, and are entitled to
recover all actionable damages, including general, consequential, incidental and special
damages, lost profits, lost opportunities, and other damages.
29
Case 8:11-cv-00516-MSS-EAJ
121.
Document 22 Filed 06/24/10 Page 30 of 62 PagelD 375
Defendants' actions were malicious, negligent, oppreSSIve, and intended to
injure Plaintiffs, rendering Defendants liable for punitive damages.
122.
WHEREFORE, Plaintiffs demand judgment for damages, interest, prejudgment
interest, attorneys' fees and costs, and for such other and further relief that this Court deems
appropriate.
COUNT V
BREACH OF FIDUCIARY DUTY
(A~ainst all Defendants)
123.
Plaintiffs incorporate by reference all prior paragraphs of this Complaint as
though fully set forth herein.
124.
Plaintiffs bring this Count against Defendants for breaching their fiduciary
duties to Plaintiffs.
125.
Defendants owed Plaintiffs fiduciary obligations. By reason of their fiduciary
relationships, Defendants owed Plaintiffs the highest obligation of good faith, fair dealing,
loyalty and due care.
126.
Defendants violated and breached their fiduciary duties of care, loyalty,
reasonable inquiry, oversight, good faith and supervision.
127.
Defendants breached their duty to act with reasonable care to ascertain that the
information set forth in the written materials and other presentations communicated to Plaintiffs
was accurate and did not contain misleading statements or omissions of material facts.
128.
Defendants breached their duty to deal fairly and honestly with Plaintiffs.
129.
Defendants received refenal fees from the Recommended Hedge Funds m
exchange for acting as an intermediary and for referring investors, including Plaintiffs.
30
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 31 of 62 PagelD 376
Defendants' failure to disclose such information to Plaintiffs represents a breach of their
fiduciary duties.
130.
Defendants breached theit: fiduciary duties owed to Plaintiffs to avoid placing
themselves in situations involving a conflict of interest with Plaintiffs, whose financial interests
Defendants had undertaken to advance, supervise, manage, and protect.
131.
Defendants breached their fiduciary duties by profiting at the expense of
Plaintiffs.
132.
Defendants breached their fiduciary duties by engaging in transactions that were
designed to, and did, result in a profit to Defendants at the expense of Plaintiffs.
133.
The acts of Defendants in breaching their fiduciary obligations owed to Plaintiffs
showed a willful indifference to the rights of Plaintiffs.
134.
Defendants had actual or constructive knowledge that they had caused or
performed inadequate due diligence in the review of the Recommended Hedge Funds.
135.
As a direct and proximate result of Defendants' failure to perform their fiduciary
obligations, Plaintiffs have sustained significant damages. As a result of the misconduct alleged
herein, Defendants are liable to Plaintiffs, who have no adequate remedy at law.
136.
Plaintiffs have suffered damages proximately caused by the fiduciary duty
breaches of Defendants in an amount to be proven at trial.
137.
Defendants are liable for, and Plaintiffs are entitled to, punitive damages in an
amount to be determined at trial attributable to conduct by Defendants that was reckless,
willful, wanton, and without regard to the rights of Plaintiffs.
138.
WHEREFORE, Plaintiffs demand judgment for damages, interest, prejudgment
interest, attorneys' fees and costs, and for such other relief that this Court deems appropriate.
31
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 32 of 62 PagelD 377
COUNT VI
BREACH OF CONTRACT
(Against all Defendants)
139.
Plaintiffs incorporate by reference all prior paragraphs of this' Complaint as
though fully set forth herein.
140.
As set forth above, Defendants obligated themselves to certain contractual
duties, including to timely and accurately report to its readers, customers and subscribers
information that they could rely upon.
141.
Defendants, as a result of the contractual relationship between Plaintiffs and
Defendant WSD, had a duty to provide uncompromised and forthright investment advice.
142.
Defendants also had a duty to disclose any inherent conflicts of interest that
might', and in fact did, arise from Defendant Rowe receiving compensation of any kind from
the Recommended Hedge Funds.
143.
Defendants did not provide uncompromised and forthright advice.
144.
Defendants committed a breach of contract by making representations that they
knew were false and misleading.
145.
Defendants committed a breach of contract by making representations that they
had conducted due diligence as to the Recommended Hedge Funds when in fact they had not.
146.
Plaintiffs have suffered substantial financial injury as a direct, foreseeable and
proximate result of Defendants' contractual breaches, as alleged herein. In addition to the general
damages flowing directly from these breaches, Plaintiffs are entitled to recover consequential,
incidental and special damages, lost profits, lost opportunities, and other economic damages.
32
Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10
147.
Page 33 of 62 PagelD 378
WHEREFORE, Plaintiffs demand judgment for damages, interest, prejudgment
interest, attomeys' fees and costs, and for such other relief that this Court deems appropriate.
COUNT VII
UNJUST ENRICHMENT
(Against all Defendants)
148.
Plaintiffs incorporate by reference all prior paragraphs of this Complaint as
though fully set forth herein.
149.
Defendants were required to have done what they said they had done in The Wall
Street Digest. To the extent Defendants did not conduct the due diligence they said they had or
that such diligence was inadequate as to the Recommended Hedge Funds, Defendants did not
earn the fees it charged Plaintiffs. At minimlim, such fees must be retumed to Plaintiffs.
150.
Defendants had a duty to provide uncompromised and forthright investment
151.
Defendants also had a duty to disclose any inherent conflicts of interest that
advice.
might, and in fact did, arise from Defendant Rowe receiving compensation of any kind from
the Recommended Hedge Funds.
152.
Defendants did not provide uncompromised and forthright advice.
153.
By their wrongful acts and omissions, Defendants were unjustly enriched at the
expense of and to the detriment of Plaintiffs.
154.
As a result of the misconduct detailed herein, Plaintiffs investments in the
Recommended Hedge Funds have been rendered worthless, yet Defendants reaped substantial
fees at the expense of Plaintiffs.
155.
Defendants have therefore been unjustly enriched and equity and good
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 34 of 62 PagelD 379
conscience require that Defendants disgorge to Plaintiffs all such unjust enrichment in an amount
to be determined at trial.
156.
Plaintiffs seek restitution from Defendants, and seek an order from this Court
disgorging all profits, benefits and other compensation obtained by Defendants from their
Wrongful conduct and fiduciary breaches.
157.
WHEREFORE,
Plaintif~s
demand judgment for damages, interest, prejudgment
interest, attorneys' fees and costs, and for such other and further relief that this Court deems
appropriate,
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs demand judgment:
A.
Awarding compensatory damages against Defendants in favor of Plaintiffs for
damages sustained as a result of Defendants' wrongdoing together with interest thereon;
C.
Awarding prejudgment interest;
D.
Awarding punitive damages as appropriate;
E.
Awarding extraordinary, equitable andlor injunctive relief as permitted by law
(including but not limited to disgorgement);
F.
Awarding Plaintiffs their costs and disbursements of this suit, including
reasonable attorneys' fees, accountants' fees, and experts' fees; and
G.
Awarding such other and further relief as may be just and proper.
34
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Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 36 of 62 PagelD 381
Exhibit A
00066862. WPD
Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 37 of 62 PagelD 382
The Carnegie Fund, L.P.
8830 S. Tamiami Trail
Suite 110 Sarasota, FL 34238
June 4,2009
Ms. Ami Marie Fonnica
73 Morris Avenue
Haworth, NJ 07641
Ms. Fonnica,
Your request to redeem your total interest in The Carnegie Fund, L.P. is being processed.
The req1.lest was submitted in December 2008, thus' putting your participation in The
Carnegie Fund, LP on schedule to tenninate March 31, 2009. Redemptions are
distributed based on the fund's liquidity, and usually within 90 days of your ending
participation date.
On or around March 23, 2009 you were redeemed $60,000 from your capital account.
Our original expectation was for those funds to be removed from the fund's participation
on January 31 st, 2009, however ~. "
constraints, it was effective February 28,
2009. Your February 200 alance of $59,845.63 still active in the fund until March
31,2009.
Unfortunate! we are still waiting for a report from one of our underlying investments
. for March 2009, thus delaying our arc nmn er.
ey are closing the fun an
a1
audits are being conducted). The Carnegie Fund, LP redemption proceeds are sent out in
an amount equal to 90 percent of the ending month's balance, proceeds shall, under
normal circumstances, be paid as soon as reasonably practicable following the date as of
which the redemption is effective. The remaining amount (the "Retained Amount") will
be paid after the completion of the annual audit.
..
In the interim of waiting for your March 2009 balance to be comple are sending
you· approximately 75 percent of your Februmy 2009 balance, $45,000. . en your
March balance is completed, we will calculate 90 percent of that
ubtract this
amount, and send you the remainder. Your "Retained Amount", 10 percent of your
March 31, 2009 balance, will be distributed upon completion of The Carnegie Fund's
2009 audit, expected in the springof2010.
Thank you for your participation in our fund and giving us the opportunity to serve you.
Sincerely,
~/.t2-e
J
Michael Corcione
Chief Operations Officer
Carnegie Management Group
• 646-546-7871
• Fax: 941-364-8447 • mjC®grcmitespringsmgmt.com
Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 38 of 62 PagelD 383
Exhibit B
00066862.wPD
~ Date
1/ 03
d/
~/1/03
g/1/04
~/1/05
-
~/1/06
C3/1/07
m
C2/1/08
Contribution
$3,000
$3,000
$3,000
$4,000
$4,000
$4,950
~0/09
rfijO/09
WO/ 09
nl
'
U
I
.-I
.-I
co
OJ
(f)
ctS
U
Transfer Within Draseena Funds Notes
Wire Transfer From Viking Fund
($25,000)
($13,605)
($38,60S)
131/09
f:!.O/09
r~
Matthew Formica Roth IRA
Senior Strength Q Fund #3575
Transfer Within Draseena Funds Notes
From Another Custodian
Kevin
Formica Roth IRA
Senior Strength Q Fund #3615
::gOate
tJ
1/ 03
Sl/03
Contribution
$8;994
$3,000
~1/04
Notes
From Another Custodian
$3,000
:l1/ 06
@1/07
7$1/08
Redemption Transfer Within Draseena Funds
$3,000
$4,000
$4,000
$4,950
~1/0S
~/09
!i9/09
/~0/09
~l
-
$30,944
($15,735)
($28,205)
($4,166)
($48,106)
N
<.0
o
Kevin Formica Regular Money
<:l
Three Oaks Senior Strength Fund #3135
Q)
i1])ate
7Jil/06
f]J../06
~/08
3@/08
~/08
@J./09
lafJ/09
~l
,
Contribution
$90,000
$10,000
$35,000
$75,000
$29,000
Redemption
Transfer From Prudential Skandia Annuity Via Wachovla Bank
Transfer From PrudentIal Skandia Annuity Via Wachovia Bank
From Navigator Fund
$239,000
($2S,OOO)
($13,605)
($38,605)
$269,944
($86,711)
C/)
,~
.,
<.0
M
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o
o,
>
u
,
M
M
00
Q)
(f)
C'CS
U
Transfer Within Draseena Funds Notes
Wire Transfer From Viking Fund
Am; Formica Roth IRA
Senior Strength Q Fund #3735
220ate
Contribution
~1/03
~1/07
$11,058
. $3,000
$3,000
$3,000
$4,000
$4,000
'1:(1/08
Redemption
Transfer Within Draseena Funds Notes
From Another custodian
-$4,950 ;
1/03
1
1/04
1/05
~1/06
($17,263)
($31,081)
/fi{J/09
8.0/09
($3,453)
1~0/09
'TAL
"'t
-
$33,008
($51,797)
N
<.0
Ami Formica Regular Money
"'C
Three Oaks Senior Strength Fund #3125
o
Q)
iJPate Contribution
7/J/06
1f}./06
Z~/08
3~/08
7g/08
ttf!/08
L'fj/08
~/08
I
l~/08
$95,000
$5,000
$35,000
$75,000
$29,000
$1,500
$1,500
~
'M
M
co
Q) .
en
ro
U
From Navigator Fund
$244,500
($25,000)
($13,643)
($38,643)
$217,508
($90,440)
(~/09
Transfer Within Draseena Funds Notes
Wire Transfer From Viking Fund
Transfer From Prudential Skandia Annuity VIa Wachovia Bank
Transfer From Prudential Skandia Annuity Via yvachovia Bank
$1,500
$1,000
'~/09
~L
o
Redemption
Richard & Marilynn Formica Regular Money
Date
Contribution
Redemption
l"CC
2/
1/02
Qf/ l / 02
$20,000
$1,500
$26,864 Transferred to Se~ior Strength Q Fun~ #5111
~3 1/05
o...TOTAL
Transfer Within Draseena Funds Notes
Three Oaks Currency Fund #219/2195
$21,500
$0
Closed Account
N
,ro
......
o
Senior Strength Q Fund #5111/9255
$26,864 Transferred from Three Oaks Currency Fund #219/2195
N
"Y/31/0S
~1/05
$50,002
$10,000
~~~~~~
$10,004
$30,000
$0
$100,006
$121,506
~/1/0S
~30/09
C:OOTAL
~OTAL
($2,427)
($2,427)
($2,427)
OJ
i.I
N
N
....
c
Richard Formica Regular Money
Date
Contribution
Redemption
Transfer Within Draseena Funds Notes
Draseena Arrow Fund II #8225
OJ
§/1/06
~/1/07
H/l/07
~/1 /08
°
$100,000
$0
$0
"
l!OTA I.
(f)
U)~
$300,000
$400,000
$200,000 Transferred to Drase~na Three Oaks Senior Strength Fund #3305
$215,302 Transferred to Draseena Three Oaks SenIor Strength Fund #3305
$0
Closed ACl;ount
- - -- -
~
~31/09
So
6';f30 j09
$0
$0
$400,000
Three Oaks Senior Strength Q Fund #3305/9255
$200,000 Transferred from Draseena Arrow Fund II #8225
$216,302 Trrmsferred from Draseena Arrow Fund 11#8225
($34,428)
($6,311)
($40,739)
($40,739)
$SZl,S06
($431 166)
~/lj07
(3/ 1/ 08
:::ilOTAL
OJ;OTAL
OJ
(/)
ic!9TAL
MarIlynn Formica Roth IRA
coData
Contrlbutlon
~1/03
Senior Strength Q Fund #3565
Tr;msfer Within Oraseena Funds Notes
$5.818
llO I)
Redemption
$4,000
$4,000
i
From Another Custodian
For 200S IRA
For 2006 IRA
1/05
109
7 / 09
0/09
L
513,818
($21,909)
~ate
Contribution
Redemption
!
($7.451)
($lU9S)
($1,860)
'+-
o
(Y)
~
Marilynn Formica Rollover IRA
ttl
~l/OZ
$15,000
Ilil/02
!!bTAl
~
$15,000
Transfer Within Draseena Funds Notes
Oranena Three Oaks Curren~ Fund /lill
From Another Custodian
$23,000 To Draseena Senior Strength a Fund #5175
$0
Closed ACCClint
N
~
<.0
o
Dl'lIseena Arrow Fund 111115
il/07
;;;1/07
3/1/08
(WTAl
N
$80,000 From Draseena Three {Jalts Senior Strength C4 Fund #5155, Marilynn Formica Rollover IF\A
$23,001 From Draseena Senior Strength d Fund #5175, Marilynn FormIca Regular IF\A (Closed) vIa Three Oaks Curren~ Fund
$106,987 To Draseena Senior Strength Fund 115155
a
$0
$0
Closed Account
c
Q)
Oraseena Senior Strength C4 Fund #5155
$100,000 From Draseena Arrow II Fund #8045 entitled Richard Formica Ph.D. P.A. Profit Sharin~ Plan & Trust
$80,000 To Draseena Arrow Fund #1115, Milrilynn Formica Rollover IRA
From Rydex High Street Financial
From Merrill Lynch, Fisher
$106,987 From Draseena Arrow Fund #lll5
From Rydex High Street Financial
E
)/31J/05
;kiP107
l~/07
l~1/07
$100,000
$120.833
ab/OS
~/08
$43.483
;(.$/09
($65,888)
'f§b/09
IjfQ/09
~TAL
$264,316
($350,000)
($50,997)
($466,885)
ALL
$Z79,316
Redemption
Redemption
($466,885)
I.[)
o
o,
>
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Richard Fonnica Roth IRA
I
~ate
Contribution
£8103
$5.545
$4,000
$4.060
~/06
~/06
;t!Y/09
8{7/09
'130/09
TAL
Redemption
For 2005 IRA
For .2006 IRA
($7,214)
($12,348)
(Sl,824)
.$13,545
SenIor Strength Q Fun? #3555
Transfer Within Oraseena Funds Notes
From Another Custodian
($Zl,386)
Richard FormIca Rollover IRA
Date
Contribution
Redemption
(J')
e:;tl/ 02
Sl$,OOO
m/02
$100,000
$9.997
Gi/02
1~07
~TAl
Transfer WithIn Draseena Funds Notes
Three Oaks Currency fund #220
From Anotller Custodia n
From Another Custodian
From Another Custodian
$196.1.57 To Draseena SenIor Strength Q Fund #5165 and then on to Draseena Arrow ;:und #1175
5124.997
$0
Closed Account
~-v
CD
Arrow fu nd 111175
o
7.If./07
$20,000 From Draseena Senior Strength Q Rollover IRA #5145
Sl 96, 157 From Oraseena Senior Strength Q Regular IRA 115165
5223,221 To Draseena SenIor Strength Q Fund #5145
7'fb./01
$IDS
~rAl
a.
$0
$0
C/O$ed Account
o
~
~/OS
~~~~,
ml07 '
~/OS
#:/08
$119,698
S100,000
$30,205
lewoS
($81,876)
IW09
Senior Strength Q Fund 115145
$100,000 From Oraseena Arrow" Fund #8045 entitled Richard Formica ~h.D. P.A. Profit Sharing Plan & Trust
$20,000 To Oraseena Arrow Fund #1175 Richard Formica Rollover IRA
From Merrill lynch, Fisher Investments
From Rydax HISh Street Flmmclal
$223,221 From Oraseana Arrow Fund #1175
From Rydal( HIgh Street Financial
RedemptIon
($30,000)
($70,000)
(SlOO,OOO)
1~/09
I~09
~TAl
$249,903
~lL
$374,900
o
o
Richard Formica Ph.D. P.A. Profit Sharing Plan & Trust
'I
~ate
Contribution
.'"
'
(J)
~~
Co-Owners Ie Co.8eneflclaries: Marilynn Ie Richard Formica
Redemption
Transfer Within Oraseena Funds Notes
Draseena Three Oaks Currency Fund 11152/1525
$117,000
~S6
cb97
($281,876)
($281,876)
($117,514)
$100,000
~97
($9 4 ,800)
cnS8
'i999
$99,307
$780,290
j!.iloo
$250,800
it.lt'oo
'lffoo
$100,000
~99
($400,404)
$367.710,
:~oo
$350,000
:~~
$383.500
i/l/0t
$150,000
2001
!/1/02
$37,000
:/1102
. SSO,ooO
($1,200,000)
($39MOO)
7/1/02
5100,000
($120,000)
2002
d 003
($263,090)
~004
;&/05
($110,000)
5250,000
$100,000
$100,000
$53,000
;~/OS
51l!J!OS
1lfs;IOS
~TAL
$2,865,607
Transferred to Draseena Arrow 1/ Fund #804/8045
Transferred to Draseena Rollover IRA FBO Marilynn Formica SSQ #5155
Transferred to Draseena Rollover IRA FBO Richard Formica SSQ #5145
Transferred to Orassena Arrow II Fund #804/8045
(S2,700,808)
c.o
Clo$ed Aceol/nr
"P=
o
Oraseena Three Oaks Curren'Y Fund #3001
I.{)
.q-;Z003
~004
Sl3S,930
$110,000
~004
)ffi,/05
-
~rAt
.-I
(SI31,000)
S120,000 Tran$ferred to Senior Strength Q Fund #5121
$245,930
($131,000)
C/OJed Meol/fit
'l
N
c.o
s:?!/OS
l@/os
~/05
57l/05
Oraseena SenIor Strength Q Fund #5121
$50,001
$10,000
S10,000
530,000
~/05
~rrio/06
($30,000)
($30,000)
($30,000)
~;m/06
J~1/07
~/08
8'TAl
$100,001
($$0,000)
n
....,
Closed Account
. Dranena Arrow II Fund 1t804/S04S
$250,000 Transferred from Three Oaks Currency Fun\l1l152/1S25
$53,000 Transferred from Three OaKS Currency Fund #152/l525
5;100,000 ·Sorrowed from DTiseena
5200,000 ·Repaymel'lt of loan
$22,487 -Interest Paid on Loan to Draseena
From High Street Financial
$100,000 Transferred to Oraseena Three Oaks Senior Strength Fund #3295
$485,868 Transferred to Oraseena Three Oaks Senior Strength Fund 113295
¥iF/os
;/AO/OS
'#PIOS
22 007
Jj.OO7
~1/07
$97,000
~1/07
§fl/08
~TAl
,
S120,000 Transferred from Three Oaks Currency Fund #3001
Redemption to Fidelity
Redemption to Fidelity
Redemption to Fidelity
5195,208 Transferred to Oraseena Three Oaks Senior Strength Fund 113295
$97,000
$0
.......
Closed Accovnr
.-I
CX)
1~1/07
~1S0107
$224,142
Ca)1/08
9Ji/o~
9/1/08
1/21/09
4/~O/09
Draseena Three Oaks Senior Strellith Fund #3295
Sloo,OOO Transferred from Orasee"a Arrow II Fund 11804/8045
From Merrill Lynch
$485,868 Transferred from Draseena Arrow 1/ Fund #804/8045
$195,208 Transferred from Draseena Senior Strength QFund #5121
530,000
From Fidelity
($71,871)
($15,501)
Case 8:11-cv-OOS16-MSS-EAJ
Document 22 Filed 06/24/10 Page 46 of 62 Pagelli39~ .
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120,000 00
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Case 8:11-cv-00516-MSS-EAJ
Document 22 Filed 06/24/10 Page 50 of 62 PagelD 395
Exhibit D
00066862. WPD
~~~~~~~~~~~~~~~~=e~6
Case 8:11-cv-00516-MSS-E
AMERICA'S
Top RANKED
MONEY MANAGER
Market Beating Performance in 2003
2008
January
February
....Mfrrelt- ~
. _.
F\lDd A
1.22%
1.84
. _.' _.. . ,,2;81-· ..
First Quarter
6.98
Fund B
1.28%
2.58
- <
-- -
. . ... "
.....
M1. -.~~-.-
7.46
5&P 500
-2.73%
-1.76
u· ' __·
.. . -.
- -. - ~.- --
-3.64
A SPECIAL REpORT F~OM
THE WALL STREET DIGEST
\
Page 5'2 of 62 PageiD 391.
6-MSS-EAJ .Document 22 :
.
D~d
,
Your Money Mdnager Return
21.7% in 2002
19.8% in 2001
55 ..1 % in 2000
After last year'e market dieaster (S&P 500 -23:3%). would you be happy with a 2L7%retum
in 2002. a 19.8% return in 20Q1 (S&P 500 -13%), or a 55.1% return on your equity investments
for the year 2000 (S&P 500 -1O.1%)? Would you be happy with. a 90.7% return in 1998 and 87.8%
in 1999?
These are the actual results achie\fed by aq ·effective team of managers in Sara.sota, F1orida.
After, 39 years on. Wall Street, Neil Moody left. the Street to form an association with Arthur
Nadel and his group to manage equity funde. The Nadel Group had enjoyed. unusual success
with private investment groups, testing a tecbnical trading system that interacts with
fundaroentaJs to produce results that conslstenily outperform the market averages.
My curiosity about Nadel's computerized trading program eventually led to a due diligence
visit to the offices of Nadel & Moody. Underatandably. I did not learn the various mathema.tical
formulae in Nadel's "black box" computer program.
What I did learn is ve.ry important for the individual investor. After 26 yealll of reviewing the
tl'iick i'eeords of over- 11.00v mutua.l funds, 6,000 mon.ey managers and 5,800 hedge funds.
Nadel's computerized investment pcogt"am has produced the best track record and mOBt
consistent returns I have ever Been.
His proprietary pNgJ;am, combined with scr-eenlng for stock · lm.damentats, ha~< CO'tl:irl~ritly -,'.'
f
produced u. Jlrofit month after month in hpth up and down markets. The·highly technical
program wed by the group is"proprietai'y, but I was given an opportunity to see it in action
during a due dilig~nce visit to their office.
A large group of computer monitors display market data continuouBIYI reviewing and
digesting current market movements and comparing them to previous data. Immediate
newawire flashes aTe intenningled with muted "tnlking heada" on CNBC~ Equity positions are
acljueted. long and ahort. by means of instnot-respoose trading programe.
Nadel & Moody offer private investment program6 for pension plans and wealthy individuals,
which are organi~ed and administered by Moody_ Not surprisingly, they do not advertise. Each
investment program is eet up as a limited paitne rship which is limited to only 99 investors.
EaCnlJrograrn is cunently accepting only accredited investors.
An accredited in';'e5tor haG a net worth of$1 million or an annual income of at least $200 1000
each year over the past 2 ),eara. An investment program is almoBt always open to accredited
Unveetora.
.
.
. case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 P'age 53 of 62 PagelD 398
Nadel Moody 1998-2002
Performance Record'
1998
Invest
1~99
S&p
Invest
Gro]W#
§OO.
S&.P
Gr~llR#
~
January
1.9
0.5
. February
March
April
May
10.7
7.0
9.1
7.7
4.3
4.4
2.4
June
....._. .- . -- J!ll:y .
Ja.nuary
February
March
April
May
June
-2.7
5.3
...
'-~'
August
September
October
November
December
4.0
3.0 .. - .....-.. ...... ..---1.1
.."--. -. . ..
--,.,
7.6
-15.8
--
2.6
"
..
7.7
3.4
6.0
....
8.1
M
5.9
M
·90.7%
. . .~~~y. "" -'-"
August
September
October
November
26.7%
December
10.0 "'· .
3.2
-3.3
4.1
4.5
6.1
3.5
4_1
. - - . .--.
January
4.7
26.5
4.6
1.5
February
March
Apnl
3.8
·2.8
5.5
-3. ~ '
4.5
5.0
-.
,,-.
..
-0.7
-2.8
6.2
1.9
1.9
7Ji
fill
19.5%
2001
8&P
fyndAH
~
·5.1
January
Fehruary
March
April
-2.0
9.7
-3.l
.May. _._-- ...: . .. '.' - . 2.8.,' --- -', ~ .- . -2.1-. . ,.- . ..... . ··May,.- .... --- .
. 2_2
June
2.3
June
July
~L6
0.4
July
August
3.2
6.1
August
September
1.5
-5.4
September
October
-1.3
October
-0.5
November
-0.6
-8.0
November
December
December
M
M
+55.1%
3.9
3.8
8&P
Fund AM
4.2
"'87.8%
2000
-10.1%
,.
®!!
1,.11
1.09
2.78
. 3.48
~9.22
-6.46
7.67
2.53 ." .. _- ,.. (}.J}~ .. _•
1.41
-2.31
L27
-1.30
1.08
-6.36
-O.Oci
-B.20
L60
1.83
-1.98
1.93
0.79
1m.
1.83
19.78%
-18.ml%
IIMaTl.rlgl!nll!nI fees. lllcelltlVI! f ees Wid tn1dins Ja . h~l'/! I/~t been dedu.c(ed lrom per!(ImUlItCejlgl,Arcs. "C()In[lOrisofi.J art:.. month 10
",oMit. Tarots « '" )'aar fa dQI~ and n.:jleC'f momMy compoutU!lng oj gairls. Nee year-Uta p'r/of.lllao(;c. i.T f/lcn:[ore. gn;ar"
"'8&P '
Fl!rul B~+
~
•
, t.
-1.57
·2.04
3.61
-6.10
3.18
2.99
3.19
3.05
2.99
L36
3.06
3.23
2.87
4.14
6.28
·7 .22
-7.88
0.44
-11.03
8.71
6.64
Mlli.
=fi..llil
-0.93
i'42.26% ·23.34%
" CumparLwlls a n: mOf/.1h co monsll. Tora i.! are .YCOI- I o -da le. and 11M Ihe .\lIm (ClIIJ.I,(I[ rhe compounded monthly returns. ·"Nel (If all
{e
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