A U.S. District Court judge in Boston yesterday doled out a $160,000 penalty to Greek Orthodox priest and hedge fund manager Emmanuel Lemelson after a jury concluded he made false statements about a biotech company whose stock he shorted.
The Securities and Exchange commission was seeking a $2.21 million penalty and disgorgement against Lemelson, the founder of investment firm Lemelson Capital Management, LLC and the chief investment officer for the Amvona Fund in Shelburne, Vermont.
Jurors last November rejected the SEC's allegations that Lemelson engaged in a "short-and-distort" scheme by shorting Ligand Pharmaceuticals Inc.'s stock and then manipulated its price during interviews by lying.
Instead, jurors found Lemelson liable for “intentionally or recklessly” making false statements about the California biotech company while betting against its stock. Specifically, the jury found he made three false, material statements during the course of his shorting campaign, Reuters reported.
Lemelson made $1.3 million in profit from his short position on Ligand. The Amvona Fund had combined net returns of 56%, the RIA said on its Twitter account.
Judge Patti Saris called out Lemelson for what she said was an “egregious" false claim he made during a radio interview, in which he said that Promacta, Ligand's hepatitis C drug, was going to disappear, Reuters said.
The judge, however, did agree with the SEC that Lemelson should be subject to a five-year injunction barring him from further securities violations because she said he continues “to defend his actions,” the news agency reported.
Lemelson defended his statements about the biotech company as recently as February during a hearing in the case, according to news reports.
The SEC did not immediately respond to a request for comment.
According to Amvona’s website, Lemelson is a "Greek Orthodox priest, activist, and investment manager known for advocating a philosophy of investment based on Christian ethics.”