FRANKFURT — Florian Homm, a flamboyant former hedge fund manager who spent the last five years in hiding, was arrested in Italy and faces extradition to the United States on securities fraud charges which could expose him to a lengthy prison sentence, the Federal Bureau of Investigation said.

The Italian police arrested Mr. Homm, a 53-year-old German who holds undergraduate and graduate degrees from Harvard University, on Friday at the Uffizi Gallery in Florence, the F.B.I. said. Mr. Homm is accused of defrauding investors of at least $200 million, the F.B.I. said. The most serious of the four felony charges carry maximum sentences of 25 years in prison.

Mr. Homm was one of Germany’s best-known financiers before he disappeared in 2007 as his portfolio of hedge funds, Absolute Capital Management Holdings, was collapsing.

Until then, Mr. Homm had been a symbol of predatory capitalism in Germany. In 2004, he bought 26 percent of Borussia Dortmund, a beloved but nearly bankrupt soccer team, and forced management changes. Mr. Homm seemed to relish his role as a so-called locust — the label one German politician gave to buyout firms — appearing on German television talk shows holding a fat Cuban cigar or posing for photographs in front of his villa on the Spanish island of Majorca.