SEC Sues Priest/Hedge Fund Manager for Stock Manipulation

September 18, 2018 James Heinsman Hedge Fund News

The SEC filed a suit against Emmanuel Lemelson, a Massachusetts priest who also works as a hedge fund manager, for publishing false “research reports” in order to push the share price of Ligand Pharmaceuticals, Inc, down.

The suit accuses Lemelson and his firm Lemelson Capital Management, of publishing misleading/false reports on popular investing websites like Seeking Alpha in order to manipulate the stock price. The SEC is seeking to recover illegal profits as well as a fine whose amount has not been disclosed.

Lemelson, who is 42, said in a statement that the SEC suit “has no merit and amounts to gross abuse of prosecutorial discretion.”

“The commission chose to bring this case based upon its enforcement staff’s personal feelings and facts be damned, win-at-any cost ambitions,” said the statement. “The government’s claims are false and will be proven to be so.”

In May 2014 Lemelson bet that the share price of Ligand Pharmaceuticals would drop. He then published reports that made negative statements about the drug company, including that the company was about to go bankrupt, according to the SEC. Lemelson wrote and published five reports, and by October the price of Ligand shares lost 34%. Lemelson successfully covered his bet, making around $1.3 million for one of his hedge funds, Amvona Fund, stated the SEC.

As an ordained Greek Orthodox priest Lemelson is allowed to hold jobs outside their religious duties, as well as to marry. The priest/fund manager has been in the news before: in October 2015 the Wall Street Journal did a profile on him. The article stated that he managed about $20 million and had made millions of dollars for his clients. He was quoted in the article as saying, “my whole life I always knew things before they happened. I guess it’s just a gift from God.”

In March 2016 Lemelson tried to sue Bloomberg for a report it published stating that the SEC was investigating his trades. The lawsuit was unsuccessful.

Emmanuel Lemelson, Lemelson Capital Management, Ligand Pharmaceuticals, SEC, stock manipulation,

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