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)

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EXHIBIT A Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 1 of 62 PagelD 346 " '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; 1 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 2 of 62 PagelD 347 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 ...... • 2 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed'06/24/10 Page 3 of 62 PagelD 348 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. 3 Case 8:11-cv-00516-MSS-EAJ 11. Document 22 Filed 06/24/10 Page 4 of 62 PagelD 349 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. 4 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 5 of 62 PagelD 350 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 5 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 6 of 62 PagelD 351 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 6 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 7 of 62 PagelD 352 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, 7 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 8 of 62 PagelD 353 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. 8 .~ .'. Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 9 of 62 PagelD 354 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 9 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 10 of 62 PagelD 355 - 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. 10 Case 8:11-cv-00516-MSS-EAJ 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 11 Case 8:t1-cv~00516-MSS-EAJ Document 22 Filed 06/24/10 Page 12 of 62 PagelD 357 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. 12 Case 8:11-cv-00516-MSS-EAJ 48. Document 22 Filed 06/24/10 Page 13 of 62 PagelD 358 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: 13 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 14 of 62 PagelD 359 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. 14 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 15 of 62 PagelD 360 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. 15 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 16 of 62 PagelD 361 . 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). 16 Case 8:11-cv-00516-MSS-EAJ 56. Document 22 Filed 06/24/10 Page 17 of 62 PagelD 362 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 ' C-'a:§e'8':tt~c\J~b'd'5t'6'~M sS:EAj'bocu menf22"" "' '''l !\! . ....... ... ,,_ FHed'661241:f:b"""'' P'age '35''of62''Pagefb''3sd ':" :"" :" i t- IF 1!' i t . g. • ; . I, f , : l •. 4 i? 1, 4 J& (P f " - " rtlol lo l;.:., JURY DEMAND The Plaintiffs demand trial by a jury on all of the triable issues of this complaint. Dated: New York) New York ~~,~~~'::-~~~~:~:~,'. '·:'~~,~_:., ..J.uii~'Jifi:~ZQI(L. ._~= _ '__ .~~ ~~ t- - - - -- - - - g as R. Hirsch SADIS & GOLDBERG LLP 551 Fifth Avenue, 21 5t Floor New York NY 10176 (212) 947-3793 .... : ..... ; .. ~ . ... " . ~ .... .. + 35 " . .. .. ... . •• ~... ;-~T/~~ " 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 '<j" Redemption $9,024 $30,974 ($15,967) ($29,164) ($3,240) ($48,371) N <.0 Matthew Formica Regular Money o "0 Three Oaks Senior Strength Fund #3145 OJ IT Date 1.../1/06 Z[1/06 ~1/08 gl/D8 -gl/08 Contribution I Redemption $85,000 $IS,OOO $35,000 $75,000 $29,000 Transfer From Prudential Skandia Annuity Via Wachovia Bank Transfer From Prudential Skandia Annuity Via Wachovia Bank From Navigator Fund $239,000 $269,974 ($86,976) (f) r~ I <.0 .-I L.{) o o I > 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 L.() 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, > U 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~ . :lD .... o ;IQ ..... .~ ~ ,... l! .. c" .... ... .., P <D r- i'- Case 8:11-cv-00S16-MSS-EAJ Document 22 Filed 06/24/10 Page 47 of 62 PagelD 392 Exhibit C 00066862.WPD .. Pf.Jntlfh' !n.tll""nll In ,... H'del Fund, (Y') CJ) (Y') .!:l!r.!!! ~ Accounr 91112005 10/112005 51112006 71112006 8111'2006 9/1/2006 101112006 111112006 I ZlI12oo6 5/111007 71112007 (]) OJ ~ CL N to ...... o CO (]) KI.;h~rd ~ & M:.udyn" N to $ t S S S 21112005 41112005 5111'2005 61112005 I o - S Rklu.rd & "....lill lI ~nn 101112004 511n004 (]) 100,00) 00 10,00400 1 0.004.00 I~,COO. OO 61,n005 S '00,000.00 '00,000 00 60,000 00 .0.01lO 00 A{;b'~:~~l~iM:.·~~'i:$* · ~+'i\" ~~\~&*(t~ ~~~J~'®@fJ>I'~~~\5!~~;:!i;?t: , · .~::I~~i!r~ ~it; K~\',n N N '. ~ ~~~ :;l ~a$"; Forml':J 5111200) 6111200) 111/2004 51112004 1111200$ 4111'2005 511n005 ...... C (]) E :::::l (J S S S S UII'200~ o o 6fl12006 1211n007 12Iln007 21/12008 S )lIn008 $ 5f/12008 $ """") 1 00 '" W"huv;. Fo{t1tl.:a "'0 if) if) ~ OO. o'oo VikiUIr! FUIHJ 12111'200) <J: w S :§{iIi.::~W-", ~~ "r~~;::~J;l~l;,,'.f3".J.-~~~~ ~ ~'lIIl~e~'li'ilZ. ~~ ??·':"l!ri; :~~r~S"e.!W:ri;~·),~f,··::~r~~~'~ o IT 100,000.00 J 1,000.00 50,004.00 400,00000 251,000.00 101,000,00 10/,000.00 100,000 00 250,000 00 10',000 00 75,ooO. ~O. FurlOlt,:iI CL ~ ~ s:n~~.<~I!V~~~M~~"'~$:····J~J~lf;~ ~r.rvl¥.g]lgll'~~f~~~AQT@~~1~~~~'&if.;@r. ~·W.~~~:i-~~:;· ;!l~.t~~_~~~t\l1 _ OJ rl ~ Richltd Formica '0 ~ COfUrlburJon StoOP R•• I EIIA/., LP 22,00000 18,~00 00 10,000.00 12,000 00 27,00000 10,002.00 11,991.00 22,000.00 90,000.00 10 DrlLSe~n., 63,000,00 85,000.00 100,000.00 50,000.00 l~,ooo .OO .S':'"lfft pj01i:i,l<~~~~J.;l~,;,)j~V}::;;r;r;~~w"",-:'~ ' ~~\!'i~.t~ ~K~~4r:.~~lZ~~~~~';:~t.,~I.~~,lii~J~~.:::- ;~!3.W;.~~~'~':f2& Anu FormicD ~ 51112003 S 6111200) S 11112004 SIII200' 1 to rl L.{) o o J/1I2oo5 4/1nOOl JllnOOl 211"006 61112006 1,11/2U07 121:n007 2/112001 )1112001 JII12008 51112008 S 1 G 1 rl M CO (]) (f) 22,000,00 18,500.00 10,00000 12,000 00 l2,ooU 00 10,00/00 11.~99W 12,00(l00 lJ~.OOO 00 to Or~C'~na GJ ,000 00 79.00000 100.000.00 50,000 00 80,00000 )4,000.00 ~ 't;~~~"1!)~:~~a,'~I~gs:\!t,j.fJ~.•. :;;i:f.;,tl"~*")grj~:'.j,t~,. '. ~:£'~~M~;f4:1.~1 U §Bii~~l<l-~t.:31:ll1!f.d~~{~l_~~l!,!:?¥."~..$!~~~ 1001 55' '5 .)[I.SJ Pllmtifff Il'Iyt~tlTl~nl1 in Int' Nldet fu"d, o::::t Matln~w 0> M Formica "'1200l $ 61(1200) S 111"004 $ 5JIIl004 S o Q.) )/112005 S 41112005 S Cl ·: m 5/112005 21112006 21112006 61112006 12/ln007 IlinoO! U11200! 3/112008 llinOOi 0... ('\J to ...... o :~ ~':~ m 22,000.00 .I<,SOO 00 10,000 00 12,ooe 00 21,000.00 10,OOJ 00 11,991.0U 2,000.00 20,000 00 8',000.00 to r ~{i.~~t?~'\'1~~m~~~J}~~~.§l~A~l!i-~~(t'3iiH:~~~~1*~ .:Bl~ 0... R..icilhrcf Sh.,,"~ F. Forllllca· PrQfil Plan & T,uSI o LL 101112001 111112001 121111001 1II1lG02 81112002 1111112002 111112002 5111200J S 11/11200) S 9/1/2004 101112004 $ N N 11111200' S 12111200. S J 1112005 S :..-1 .~ N ' (0 o ::a Q.) '1112001 $ +-' C 100,000.00 400,000.00 JIO,OOO.()O 15,000.00 71,000.00 JO,OOO 00 120,000 00 10,000,00 10,000,00 150,000,00 lOU,OOO,OO 150,000 00 )50 ,000.00 50,000 00 10,100,00 (J1l 012 007 2,000,00000 10 loilov« IIIA., Vik"'~ IRA ~JOI2006 Q.) E :::::l U o o I""') <{ YiklPlX IKA ...-1 lO Slr«1 ,he,' II> DI.L$~~tI ... Fh;hcr 'U"'cstUlc!n!S ,h(n 110) Dr.\5ccn:l ~'",id Ridlllrd Formr~~' Rollov~' IRA IU/I1200ol. S T111$ Wi\! n $lmIU ,ollo\"\.:, IfOil! 111,= !tlr.:h~td F f\"',lIl ..·.l ·Illot;t Sh;!fln!::.!JINhlt( Tru!it 99'),47.\ 00 2~O,OOO 6/)012006 60012007 S 00 10 High Sll'e~llh.:n to OJ'I:i~C'lIn 125.000.00 10 Fi:s,ilt( "'\>Ccslnlc.U$ 'h~. llo Drl1St:cn~ $1l:~i~~,)~ ~~~~~;:,:::"Jt!~·t~;<; ·~,.~~mJm1l!~~'l:~i!::2~:~~t.!9;f.@.i..~;l£iff,~~~1\m~~m~?7iil·!5: ··~i· ··]ilfi·~~:",;:(' Rrdl:ard F .crmlca . R~~"r:U' . ':~~~":;"Ji:;~;t?"l!t,~'~~ UtA mnOVl S 99,7'25.00 sJl~pj,,1§\~\~~~"ii~'?l~<:.~'lt~!l!'~:! "~ 1r~d~A;W1~;m:~r.:t~w,~ ~~---'l.?~g~!lt."'.'jlitJl~~\:,~,·\~£~]R:f,,(;; ,~'i1!l1~~;;j~ Manlyll" FOlm;" I lD tD Hi~h 250,000.00 18,OW,W Sq!>."J:~·w;t'c~.&~}.',~lU~.~,'!"7.~1i',> aq.~i~Zt~*'t~ ' ~jf~~~~~~~~~~~ ~~.w~~if,:~>.iI}.!!tB~~~~t!{' •~~".!f.~~'~i;:&~ki!~:;:"c.~.~ ;~~~;;!i;~~J.'~{;ri;;jl.! ~ to 2~O.OOO . O(} $ 11i/200H S W I (J) (J) Dr4S~en • 87,000 O<J 62,000,00 100,000,00 50,000,00 24,000,00 2/1/2002 S 7/112002 S 49,725.00 3&.1'1.00 '$yjlSt~~~~~l~~~~).t:,E;"fi~~.t~~~!!:~~~~~~~i~..at_w~~~~~~$~~!~h~;~'mh.'i!n~ff$-::J <~~ . . . ~~. o oI '> U I ..-I ..-I OJ Q.) (f) m {) lOOml7l.XLS) 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<!r chan Ihl! sum uf mornhly p eifQrnlQ.llct. becau.~1! of CQnl/'<)uuding. · ·-'Na of aU Fus aru! fupellses. fast per/ofTfl(1Jl.ce if no 8uaroJUec offUmre ~'ulQ ' ' . ~ ~ ... 1,...· 1••• :.. Case' 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 54 of 62 PagelD' 399 2002 2QOl ;" 8&P FpndA+'" April ryIay June Flm4 B·... 600 1.71 1.09 2.78 1.83 2.53 ~.41 .January February rv1arch July A.ugust September October Novem.ber December FundA~· January February 3.48 4.46 1.27 l.18 1.08 1.99 3.32 ·0.04 4.09 1.60 1.93 3.82 1J!2 3J.a +19.78% ·34.05% -9.30 ·6.38 7.67 0.56 -2.31 -L30 -6.36 -8.20 March April ~. "'-- May June July August September <kt6ber November December 1.83 1.96 ~ 1.26 0.95 1.25 1.23 L24 L09 1.32 1.63 1.73 3.16 4.29 Q.1B ~21.74% -13.03% >" "'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<!s and e.xpe,crI.lS, u:dudlng l'(.rjomlQII Ce f ee for 200 I {lIId 2002. P(lSl pu fonnrUlce is rIO (ltlarant<:t offoture resu{cs. The S&:'f 500 Indu is Utllltanaged. docs /101 reflect advisory f ees. ma y M\'e vo/mi/iry or ot"~r (/lQlenai characteristics rhac are dif/e/"t'.nt from coe F lttld ilIld Is {Ilduded for ilIu.q«IC;OJI purposes. Limited partnerships of this type include a manageJUent fee and an incentive fee, Minimum investment is $100,000. The investment should be viewed 8S long term. However:, investors may redeem all or a portion of hislher investment at the end of any calender quarter. Nadel & Moody offer private programs tha.t are available to qualified investors and only through the fum's offedng ma t erials. Over the past 63 months of ~anaging money~ Nadel's Management Group has besn down only twice and fla.t~ once. During the Brun,e period, the S&P 600 Index. has been down 33 months out; of 63. ' While past performance is no guarantee of future result6, keep in mind that a consiBtent return of 26% will double your money every three yeat'6. ann~l If.y.ou have questions or would like to r<)view the flrID'6 offering l3umm~ry, :~~Jl (800) 966-7693, o r you maya-mail YOUl;' name, addreE'l15 and telephone number to i'nfo@carnegiea~eet:toro and we will mail the company'a information out to you. . Sincerely, Donald H. Rowe Ch.airman Carnegie Mset Management I ~ R~TREET DIGESTJ rt \. Orffi SARASOTA TOWIlR • SARASOTA, A- JA236 Phone: 800·165·5050 • Fax:941-364 ·B441 www.walistre<:ldi&esCcoll1 Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 55 of 62 PagelD 400 Exhibit E 00066862.WPD Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 56 of 62 PagelD 401 CARNEGIE ASSET MANAGEMENT, One Sarasota Tower INc. Sarasota, Florida 34236 Suite 602 Did Your Money Manager Return 55% in 20aO? ' " ' --.-- ~ .. •• -- , . - ...... . . _ - - ....... ,." . • ••••• ,.. ••••p - . . . . . .... ~. . . . . . .~ . . . ~~ ......... - •• " ' - . .. .... , . - -...-.-,-- Dear Investor, Mer last year's market disaster, would you be happy with a 55.1 % return on your equity investments for the year 20001 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 an equity hedge fund. 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 ma.·ket averages. 1998 1999 Invest* S&P GrOUR 500 1.9 10.7 0.5 7.0 March April May June 9.1 4.4 7.7 4.3 2.4 -2.7 5.3 4.0 JUly -1.1 November 3.0 7.6 2.6 3.4 6.0 December M 5.9. 5.6 90.7% 26.7% January February August September October -15.8 7.7 8.1 2000 Invest* S&P 500 GrouQ 4.2 10.0 3.2 -3.3 4.7 3.9 4.5 3.8 -2,8 6.1 5.5 3.5 4.1 -3.2 3.8 -0.7 4.5 -2.8 5.0 6.2 7.9 1.9 7.6 5.8 87.8% 19.5% Invest* Hedge Groull Fund 6.5 S&P 4.7 26.5 4.6 6.7 4.7 3.0 3.6 3.9 $O'" 1.5 2.8 3.2 . 3.9 0.4 4.0 3.2 3.1 1.5 2.5 3.1 -1.3 -0.6 0_8 59.6% 55.1% 2.3 500 - 5.1 -2.0 9.7 -3.1 -2.1 2.3 -1-6 6.1 -5.4 -0.5 -8.0 0.4 -10.1% 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. *Managemenl fees. incentive fees and trading fees have not been deducted from performance figures. Comparisons are month to month. Totals are year w date. ""'Net ofall Fees and Expenses. Past performance is no guarantee of future results. 941-954-5500 800-966-7693 0 Fax: 941-364-8447 • , Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 . Page 57 of 62 PagelD 402 CARNEGIE ASSET MANAGEMENT, INC. What I did leam is very important for the individual investor. After 25 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 has consistently produced a profit month 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. Eq~ty positions are adjusted, long and short, by means ofinstant-respo~setrading 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 ~dvertise. Each investment program is set up as a limited partnership which is limited to only 99 investors. Each program may also include up to 35 nonaccredited investors. An aecredited investor has a net worth 0[$1 million or an annual iucome of at least $200,000 each year'over the past 2 years. An investment program is almost always open to accredited investors. Non-accredited investors may have to wait a month or so for the next available program. Limited partnerships of this type include a management fee and an incentive fee. Moody's investment programs, however, are unique because they do not charge an incentive fee until investors have received the equivalent return of the S&P 500. '. Minimum investment is $100,000. The investment should be viewed as long term. However, investors may redeem all or a portion ofhislher investment at the end of any calender quarter. Nadel & Moody offer private programs that are available to qualified investors and only through the finn's ?ffering materials. If you have questions or would like to review the fum's offering summai:y, call Pam McDonald at (800) 966-7693. Donald H. Rowe Chairman Carnegie Asset Management Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 58 of 62 PagelD 403 Exhibit F 00066862.WPD Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 3/312009 Financial investment newsletter - WaIL.. --~ Page 59 of 62 PagelD 404 . , WALL STREEtS MOST WIDELY READ INVESThffiNT ADVISOR Market Beating Petformance in 2003 2003 Fund A Fund B S& P 500 January 1.22 1.28 -2.73 February 1.84 358 -1.75 March 2.81 3.44 0.83 April 2.98 3.32 B.13 May 3.61 4.00 5.09 June 3.i3 3.05 1.13 July 4.12 2.48 1.62 August 3.07 3.63 1.79 26.38% 14.55% Thru 8131/03 25.08% Did Your Money Manager Return 21.6% in 2002 19.8% in 2001 55.1% in 2000 Enter ticker symbol ~~".,,,,,,...--.rr-B'"9!~<, -. ;"'i--' ,::-" :.t!".,~Jl.,.,~. Exdusive Broker Reseor(.b After last year's market disaster (S&P 500 -23 .3%), would you be happy with a 21 .6% return in 2002, a 19.8% return in 2001 (S&P 500 -13%), or a 55 .1% return on your equilY investments for the year 2000 (S&P 500 -10.1 %)? Would you be happy with a 90.7% Teturn in 1998 and 87 .8% in 1999? Enter T icl<er These are the actual results achieved by an effective team of MUIlaTfEX ft,/VUTOR NETWORK I__ J tI!)'· www.carnegieasset.com/nadel.html I, ument 22 Filed 06/24/10 Page 60 of 62 PagelD 405 Case 8:11-cv-00516-MSS-EAJ Doc 3/3/2009 .Finanddl investment newsletter ,. WaiL .. . . mana~efs: In Sai-asola, Flo'~da: Aft~r 39 y~ar; 9~ Wall Street Neil Moody left the Street to form an association wilh Artl1ur Nadel and his group to manage equity funds . The Nadel Group had enjoyed unusual success wilh private investment groups, testing a technicallrading system lhatinteracts with fundamentals to produce results that consistently outperfonn the market averages . My curiosity about Nadel's computedzed trading program eventually led to a due diligence visit to the offices of Nadel & Moody. Understandably. I did not learn the various mathematical fonnulas in Nadel's "black box' computer program. What I did learn is very important for the individual investor. AftE'f 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 lrack record and most consistent returns 1have ever seen. His proprietary program. combined with screening for stock fundamentals, has cons.stently produced a profit month after month in bolh up and down markets. The highly technical program used by tile 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 Hashes are intermingled with muted "talking heads" on CNBC. Equity positions areadjllsted, long and short, by means of instantresponse trading programs. Nadel & Moody offer priv~ts investment programs for pension plans and wealthy individuals. which are organized and administered by Moody. Not surprisingly, they do not advertise. Each investment program is ~et-up as a limited partnership which i.s fimited to only 99 irwestors. Each program is currently accepting only accredited investors. An accredited investor has a net worth of $1 million or an annual income of at least $200,000 each year over the past 2 years. An investment programs is almost always open to accredited investors. Limited partnerships of this type include a management fee and an incentive fee. Mini mum "nvestmentis $100,000. The investment should be viewed as long term. However, investors may redeem a1\ or a portion of hislher investment at the end of any calender quarter. Nadel & Moody offer private programs that are WW\'l.carnegieasset.com/nadel.html 2/ Case 8:11-cv-00516-MSS-EAJ Document 22 Filed 06/24/10 Page 61 of 62 PagelD 406 Exhibit G 00066862.WPD -.:: ~S" 8:11-GV 00516-MSS..EAJ ~ ~. .. DocllmOOt-22 ,r;~ed:4WALL =:~;:ID 407\' , . . , . . -t' CARNEGIE ASSET MAN). DoNALD 1 B830 S. Tamiami. Trail Suite no I H. ROWE PUBUSH£I<. Sa (~ i - - - - -- -------l! gsl()S.'"TAMIAMITRAIL· SUiTEllO' SARASOTA.FL 34238 941-')54-5500 - 1-800-785·5050 • E ·Malldrowe@wsllru-cddigest.caffi 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 hlre just two or three. Hinng aU of them is the best strategy to reduce risk and it will be remarkably simple and cost effective for you. The source of these money D;lanagers is multiple databases of over 16,000 U.S. money managers which r downloaded into my database. I rank the ~ est to worst and focus on the m?ney managers in the top one percentile wlth no portfolio lossE'.s. Which Investment Strategies Are The Most Successful? There are 15 basic investment strategies; 81 if you include n.uances and modifications by the manger to reduce risk and enhance ~turns. But any strategy with little or no corr~­ lation to the movements of the stock and bond markets is the key to consistent profts quar-ter after quarter, year after year, without disappointi~g losses. Sophisticated stt;ategies that are able to capture profits from price imbalances in the stock an~ bon?- mark~ts ar~ unusually successful beca~e market im~~lances are always present (l.e. pnces that are eJ.ther too high or too low)_ Ph.D. malhemab.cIans and computer science "Quants" skillfully exploit these daily market-imbalances while reducing exposure to losses. These managers usually have high alphas and low betas_ I am constantly addin 1 . IS to our main in-house database.J3ut our focus is alwa S on the mana ers with no losses n a quarterly and ,annual basis. screening managers for the bes . mont y per ormance all! reduced risk is a qaily Erocess. It is the best strategy, perhaps the best insurance policy (have found to insure a COtlSlstent profit for you and me, quarter after quarter, year after year. [do not have a favorite investment strategy. Nor do [ have a favorite money manager. The ultimate goal over time is to allocate an approximately equal portion of our assets to each of aprroximately 100 managers_From time to time, however, the minimum investment for each 0 the top 100 managers will have an influence on portfolio allocation percentages- • 800-966-7683 • 941-366-4421 • Fax: 941-364 ·8447

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