A Glen Cove money manager and his two firms defrauded investors while reaping more than $8 million in illegal commissions and fees, the Securities and Exchange Commission says in a federal lawsuit filed this week.
In many cases the manager, Warren D. Nadel, told his clients he was buying and selling securities on the open market but in fact he was trading them in-house among his own clients, reaping improper commissions, the SEC said.
He inflated the value of clients’ transactions and assets in their monthly statements, the agency said.
Nadel did not immediately respond Friday to a request for comment left on his company voicemail.
“Warren D. Nadel, through his investment advisory firm Registered Investment Advisers (RIA) and his broker-dealer Warren D. Nadel & Co., induced clients to invest in a purportedly liquid, cash management strategy that engaged in market transactions,” the SEC said.
Nadel purposefully overstated the value and liquidity of client holdings, the SEC said.
"Nadel and his firms abused their clients' trust by investing their assets in a strategy that they misrepresented in nearly every way," George S. Canellos, Director of the SEC's New York Regional Office, said.
"Nadel created the illusion of a liquid market for their holdings at inflated values, depriving his clients the opportunity to make meaningful investment decisions with their money."
The SEC filed the complaint in U.S. District Court for the Eastern District of New York.
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