[ by Melanie Gretchen ] A hedge fund manager, who last year settled SEC civil charges that he placed investors' funds with convicted Ponzi operators without having conducted thorough due diligence, was arrested by FBI agents and has been himself charged with fraud. Chetan Kapur, the sole managing partner of ThinkStrategy Capital Management LLC, was charged by the SEC with securities fraud, investment adviser fraud, and 4 counts of wire fraud, according to a grand-jury indictment unsealed last Tuesday.  The company, ThinkStrategy, was formed in 2002 and, at its peak in 2008, managed about $520 million in assets. According to the latest SEC complaint, Kapur and his firm, ThinkStrategy, allegedly made misrepresentations to investors about the performance, longevity, and assets of the funds they managed, as well as the credentials and experience of ThinkStrategy's management team. Consorting with the 'Devil'. In a civil case last year, the SEC alleged that Kapur invested ThinkStrategy funds with convicted Ponzi operators Samuel Israel III and Arthur Nadel without conducting thorough due diligence.  To settle those SEC charges, Kapur agreed to pay disgorgement and penalties, and was barred from the securities industry.

• Nadel died in April in a N.Carolina prison at the age of 80,  He was arrested in 2009, and amitted to criminal charges in February 2010.
• Israel, 52, is serving a 20-year sentence after pleading guilty in 2005 to defrauding clients out of more than $400 million.

[WSJ, 7/17/12]