(May 3 – 17:20 ET) – The Securities and Exchange Commission has filed a civil fraud action against prominent money manager, Stevin Hoover, and his firm, Hoover Capital Management Inc. The SEC is alleging that Hoover and his firm misappropriated over US$475,000 from clients between 1995 and 1999. 

Hoover was featured in 1998, 1999 and 2000 in Worth magazine’s annual article of selected money managers’ stock picks.

The  complaint alleges that Hoover and HCM misappropriated client funds by making US$404,000 of unauthorized transfers from client accounts. The SEC alleges that Hoover misappropriated the money by forging clients’ signatures and causing cheques to be issued without the approval of his clients.
Hoover also overbilled clients more than US$70,000 in management fees, says the SEC.

The SEC alleges that Hoover used some of  the client monies to support his lifestyle by purchasing a car valued at more than US$40,000 and by paying off a personal credit card bill of approximately US$60,000.  The SEC also alleges that during 1998  and 1999  Hoover  breached  his fiduciary  duty
to  his clients by obtaining more than US$1million in personal loans from them by making misrepresentations about the purpose of  the loans, and a substantial portion of the personal loans remains outstanding.

The SEC seeks disgorgement of Hoover and HCM’s ill-gotten gains, plus prejudgment interest, and civil penalties.