Reed E Slatkin

Investors who gave money to fallen investment manager Reed E. Slatkin already are looking for ways to recoup their expected losses through lawsuits--but they're finding few obvious targets, investor attorneys said.

In a move to preserve what's left of Reed E. Slatkin's crumbling financial empire, a U.S. Bankruptcy Court judge Wednesday named veteran forensic accountant and former FBI agent R. Todd Neilson as trustee for Slatkin's Chapter 11 case. Regulators and investors had pressed for the emergency appointment after the FBI and Internal Revenue Service raided Slatkin's offices and the Securities and Exchange Commission obtained a court order freezing his assets Friday.

The U.S. trustee's office filed an emergency motion Monday asking that a trustee be appointed to take over EarthLink co-founder Reed E. Slatkin's Chapter 11 bankruptcy case. Slatkin has been sued by investors for allegedly mishandling their funds, and his offices were raided Friday by the Federal Bureau of Investigation and the Internal Revenue Service. The Securities and Exchange Commission won an order, also Friday, freezing Slatkin's assets. U.S.

Investment guru Reed E. Slatkin's 50th birthday bash in early 1999 had all the trappings of a gilt-edged, Southern California soiree. The highlight of the party at the Santa Barbara Biltmore Hotel was a short, star-studded video made just for the occasion. The ballroom erupted in cheers as Kevin Costner, dressed in a baseball uniform, praised Slatkin's athletic prowess, and Arnold Schwarzenegger jokingly lauded the 180-pound money manager's weightlifting skills.

Federal regulators pounced on EarthLink co-founder Reed E. Slatkin on Friday, raiding his offices and persuading a federal judge to freeze his bank and brokerage accounts to prevent Slatkin from hiding investors' money or destroying documents. The actions turn what had been a civil matter--with investors accusing Slatkin of running a 16-year Ponzi scheme--into a criminal investigation. Moreover, documents filed Friday revealed several Hollywood names on Slatkin's list of investors. At 8 a.m.

Few who knew EarthLink co-founder Reed E. Slatkin would have believed he would come to this. But on Thursday, federal regulators, attorneys and government investigators said his crumbling financial empire faces claims of more than half a billion dollars in what is one of the largest potential Ponzi schemes ever probed.

EarthLink Inc. co-founder Reed E. Slatkin, under investigation for running an alleged Ponzi scheme, told some of his clients in January 2000 that he was getting out of the money-management business, but instead continued to accept new investments until early this year. Slatkin, a Santa Barbara venture capitalist, told the investors in a Jan. 7, 2000, letter that "a question again has been raised by the [Securities and Exchange Commission] . . .

The top two executives of Internet provider EarthLink Inc. invested their personal money with company co-founder Reed E. Slatkin, who is under federal investigation for allegedly running a Ponzi scheme. Sky Dayton, EarthLink's 29-year-old chairman and a key player in the '90s Internet boom, and Chief Executive Charles Garry Betty were among the people who invested money with Slatkin, according to a company spokesman.

Investors are accusing Reed E. Slatkin, a co-founder of the giant Internet service provider EarthLink Inc., of operating a Ponzi scheme that may have resulted in the loss of least $35 million of their funds. Slatkin--a Santa Barbara socialite and venture capitalist--also is under investigation by the Securities and Exchange Commission for his financial activities, which allegedly included a day-trading operation that promised annual returns of up to 60%.