Stevin Hoover
Former Kansas City hedge fund manager who ran Hoover Capital Management's Chestnut Fund and was permanently barred from the investment-advisory industry after pleading guilty to defrauding clients of roughly $200,000.
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- Country
- United States
- Firm
- Founder, Hoover Capital Management, Kansas City, Missouri, manager of the Chestnut Fund LP hedge fund
- Outcome
- Pleaded guilty to securities fraud (2002); ordered to pay $1,011,007.48 in disgorgement and interest; permanently barred from association with investment advisers; served an 18-month prison sentence
Overview
Stevin Hoover founded Hoover Capital Management in Kansas City, Missouri, where he managed the Chestnut Fund LP hedge fund. Between 1995 and 2001, according to the Securities and Exchange Commission, Hoover and his wholly-owned entities misappropriated funds from investment advisory clients, including the Chestnut Fund, and distributed fictitious account statements to conceal the misappropriations (SEC).
Regulatory and criminal case
The SEC filed a civil complaint in May 2001 alleging Hoover misused up to $3 million in investor capital, and all accounts at Hoover Capital Management and its funds were frozen that November under a temporary restraining order (American Banker). Hoover pleaded guilty to one count of securities fraud on August 7, 2002, admitting to moving approximately $200,000 in client funds into personal accounts, which he used in part to buy a luxury car and pay down personal credit card debt (American Banker). In February 2003, a federal court ordered him to pay $1,011,007.48 in disgorgement and prejudgment interest along with a permanent injunction, and the SEC separately imposed a permanent bar from association with investment advisers. He served an 18-month prison sentence followed by three years of supervised release, and a court-appointed receiver distributed $1.1 million in recovered funds to victims (SEC).
What this profile does not claim
This profile relies on contemporaneous reporting and the SEC’s official litigation record; it does not cover any activity by Hoover after the conclusion of these proceedings in the mid-2000s.
Timeline
- 1995-2001
- Hoover and his wholly-owned entities misappropriate funds from investment advisory clients, including the Chestnut Fund LP hedge fund, and distribute fictitious account statements to conceal the misappropriations, according to the SEC.
- 2001-05
- The Securities and Exchange Commission files a civil complaint alleging Hoover misused up to $3 million in investor capital.
- 2001-11
- All accounts at Hoover Capital Management and its funds are frozen following an SEC temporary restraining order.
- 2002-08-07
- Pleads guilty to one count of securities fraud, admitting to moving approximately $200,000 in client funds into personal accounts, including to buy a luxury car and pay down personal credit card debt.
- 2003-02-11
- Is ordered by the court to pay $1,011,007.48 in disgorgement and prejudgment interest, along with a permanent injunction against future securities law violations.
- 2003-02-26
- Receives a permanent bar from association with investment advisers.
Sources
2 sources (2 tier 1), each opened and read against the claim it supports. Every source is independent of the subject; no first-party material is cited. See the source policy.
American Banker and an SEC litigation release were both fetched and read in full. American Banker is an independent U.S. financial trade newspaper unaffiliated with Hoover; the SEC release is the U.S. government regulatory record of the civil and administrative proceedings. Together they cover distinct aspects of the case — the criminal guilty plea and its circumstances versus the civil judgment, administrative bar, and case timeline.
- Hedge Fund Manager Stevin Hoover Pleas Guilty to Fraud Supports: His background, the Chestnut Fund LP, the circumstances of the misappropriation, and the 2002 guilty plea and potential penalties.
- Stevin R. Hoover (Litigation Release No. 18934) Supports: The formal allegations, the 2003 civil judgment and disgorgement amount, the administrative bar, the criminal sentence, and restitution to victims.
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