Hedge Fund Priest Sued by SEC for Alleged Stock Manipulation
Hedge Fund Priest Sued by SEC for Alleged Stock Manipulation
(Bloomberg) -- A Massachusetts priest who moonlights as a hedge fund manager was sued by federal regulators for allegedly making false statements about a biotech company to try to drive down its share price.
In an attempt to profit from his short position, Emmanuel Lemelson published false “research reports” about Ligand Pharmaceuticals Inc. on popular investing websites, including Seeking Alpha, according to a complaint filed Wednesday by the U.S. Securities and Exchange Commission.
The agency accused Lemelson, 42, and his firm, Lemelson Capital Management, of market manipulation. It’s seeking an unspecified fine and a return of illegal profits, according to the complaint.
In a statement, Lemelson’s firm said the SEC suit “has no merit and amounts to a gross abuse of prosecutorial discretion.”
‘False Claims’
“The commission chose to bring this case based upon its enforcement staff’s personal feelings and facts be damned, win-at-any cost ambitions,” he said in the statement. “The government’s claims are false and will be proven to be so.”
After betting in May 2014 that Ligand shares would decline, Lemelson began issuing reports that made negative claims about the company, including that it was teetering on the brink of bankruptcy, the SEC said. In all, he published five different reports. By October, shares dropped 34 percent and Lemelson covered his position, making about $1.3 million for a hedge fund he managed, the Amvona Fund, according to the regulator.
Lemelson was ordained by the Greek Orthodox Church, which allows priests to marry and hold jobs outside their religious duties.
The money manager gained attention in a October 2015 Wall Street Journal profile. The article said Lemelson managed about $20 million, had made millions of dollars for his investors and quoted him as saying, “my whole life I always knew things before they happened. I guess it’s just a gift from God.”
Lemelson unsuccessfully sued Bloomberg for reporting in March 2016 that the SEC was investigating his trades.
To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net
To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott
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