MedCap Management and Research
MedCap Management and Research | Notes
The following piece on MedCap Management & Research is being published as part of our Hedge Fund Tracker Tool, our daily effort to track hedge funds in the industry.
Resource #1: The Securities and Exchange Commission has charged San Francisco-based hedge fund MedCap Management & Research and its principal, Charles Toney, with portfolio pumping.
The SEC alleges that Toney made extensive quarter-end buys of a thinly-traded penny stock in which his fund was heavily invested, more than quadrupling the stock price and allowing him to report artificially inflated quarterly results to fund investors.
According to the SEC, MedCap Partners was suffering from dramatic losses and facing increasing redemptions from fund investors by September 2006. Over the last four days of the month, Toney—through a separate fund that MMR managed—placed numerous buy orders for a thinly traded over-the-counter stock in which MedCap already was heavily invested. Toney's buying pressure caused the stock price to more than quadruple, from $0.85 to $3.72.