U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18934 / October 18, 2004
SEC v. Hoover, Civ. A. No. 01 CV 10751 (RGS) (D. Mass.)
RECEIVER DISTRIBUTES $1.1 MILLION TO VICTIMS OF MONEY MANAGER STEVIN R. HOOVER
The Securities and Exchange Commission ("Commission") announced today that the Honorable Richard G. Stearns of the United States District Court for the District of Massachusetts has approved an Initial Distribution Plan to distribute $1.1 million to victims of former money manager Stevin R. Hoover. The distribution will be supervised by Keith D. Lowey, CPA, of Foxborough, Massachusetts, who was appointed by the court as receiver over the Chestnut Fund LP, a hedge fund once-managed by Hoover.
In its complaint, the Commission alleged that between 1995 and 2001, Hoover and his wholly-owned entities misappropriated funds from investment advisory clients, including the hedge fund. The Commission also alleged that Hoover solicited and obtained investments in the hedge fund by making fraudulent misrepresentations to prospective investors, and that Hoover attempted to conceal his misappropriations by distributing fictitious account statements to investors.
As previously announced, on February 11, 2003, the court entered a Final Judgment, by consent, ordering Hoover and/or his wholly-owned entities to pay disgorgement of ill-gotten gains and prejudgment interest in the amount of $1,011,007.48, and permanently enjoining them from future violations of the relevant provisions of the federal securities laws. On February 26, 2003, the Commission entered an administrative order, by consent, that permanently bars Hoover from association with an investment adviser. In a related criminal proceeding, Hoover pleaded guilty to criminal charges that he defrauded investment advisory clients out of nearly $200,000 in violation of Section 206(2) of the Investment Advisers Act of 1940. Hoover is currently serving 3 years of supervised release, following an 18 month prison sentence.
For more information see Litigation Release Nos. 17981 (February 11, 2003), 17825 (November 1, 2002), 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).