LITIGATION RELEASE NO. 17284 / December 19, 2001
SEC v. Hoover and Hoover Capital Management, Inc., Civ. A. No. 01 CV 10751 (RGS) (D. Mass.)
SEC OBTAINS PRELIMINARY INJUNCTION AGAINST FORMER BOSTON-AREA MONEY MANAGER STEVIN R. HOOVER FOR THEFT OF CLIENT FUNDS
The Securities and Exchange Commission (the "Commission") announced today that money manager Stevin R. Hoover and his registered investment advisory firm, Hoover Capital Management ("HCM"), have consented to the entry of a preliminary injunction against future violations of the antifraud provisions of the Investment Advisers Act of 1940 ("Preliminary Injunction") pending the resolution of the Commission's action against them. The Preliminary Injunction also freezes Hoover and HCM's assets (except for funds unrelated to the fraud acquired after November 21, 2001).
In its motion for a Preliminary Injunction, which was filed on November 15, 2001, the Commission claimed that between at least May 2000 and September 18, 2001, Hoover, HCM and an unregistered adviser that Hoover controls, Chestnut Management LLC, withdrew more than $470,000 out of the Chestnut Fund LP, a domestic hedge fund managed by Chestnut Management, and improperly used these funds for personal and business expenses. The motion was filed in the Commission's pending action SEC v. Hoover and Hoover Capital Management, Inc., Civ. A. No. 01 CV 10751 (RGS) (D. Mass.), in which it is alleged, among other things, that Hoover and HCM had misappropriated $475,000 from HCM clients between 1995 and 1998. Previously, the court had entered a temporary restraining order against Hoover and HCM on November 19, 2001.
For more information see Litigation Release No. 17240, November 19, 2001; Litigation Release No. 17236, November 16, 2001; and Litigation Release No. 16983, May 2, 2001.