Hoover and Hoover Capital Management, Inc.

LITIGATION RELEASE NO. 17825 / November 1, 2002

SEC v. Hoover and Hoover Capital Management, Inc., Civ. A. No. 01 CV 10751 (RGS) (D. Mass.)

MONEY MANAGER STEVIN R. HOOVER SENTENCED TO 18 MONTHS IN PRISON FOR SECURITIES FRAUD

Former money manager Stevin R. Hoover was sentenced to 18 months in prison yesterday on charges that he defrauded investment advisory clients out of nearly $200,000. Hoover, age 54, was sentenced by Judge Douglas P. Woodlock of the U.S. District Court for the District of Massachusetts to 18 months imprisonment, followed by 3 years of supervised release during which Hoover will be barred from providing any financial services or acting as the custodian for funds belonging to other people.

Hoover is the sole owner of Hoover Capital Management, Inc. ("HCM"), a registered investment adviser, and Chestnut Management LLC ("Chestnut Management"), an unregistered investment adviser. On August 7, 2002, Hoover pleaded guilty to one count of securities fraud in violation of Section 206 of the Investment Advisers Act of 1940 charging that Hoover engaged in a scheme to defraud his investment advisory clients by diverting nearly $200,000 from client accounts to his own account. Hoover spent the misappropriated money on such things as a luxury automobile for his wife and paying off personal credit card debt.

The Securities and Exchange Commission's civil enforcement action against Hoover, HCM and Chestnut Management remains pending.

For more information see Litigation Release Nos. 17666 (August 8, 2002), 17487 (April 24, 2002), 17284 (December 19, 2001), 17240 (November 19, 2001), 17236 (November 16, 2001) and 16983 (May 2, 2001).