Rev. Father Emmanuel Lemelson and Lemelson Capital Mgmt., LLC v. Securities and Exchange Commission
Shelburn, VT (August 1, 2023) – Whistleblower and activist investor Rev. Fr. Emmanuel Lemelson (Lemelson) has filed for a writ of certiorari in Lemelson, et al. v. SEC, asking the U.S. Supreme Court to grant his petition in an unprecedented nine-year legal battle with the SEC over Ligand Pharmaceuticals (NASDAQ: LGND).
To access the full writ of certiorari, click here or see on Scribd below.
This follows a November 2021 federal jury trial that cleared Lemelson of all fraud charges that were alleged by the SEC in a baseless 2018 complaint.
“The Supreme Court must uphold its legacy of safeguarding First Amendment rights.” Said Fr. Emmanuel Lemelson. “The SEC’s concerted effort to use litigation to "silence" a whistleblower, fueled in part by inappropriate lobbying and prosecutors bent on ignoring the Constitution, is utterly shameful,” Lemelson added.
The 2021 federal jury specifically found that Fr. Lemelson did not “intentionally or recklessly engage in a scheme to defraud, or any act, practice, or course of business which operates or would operate as a fraud or deceit.” The jury also determined that he did not defraud his own investors, even under a lower negligence standard, and that his harshest statements about Ligand’s insolvency were not untrue.
Lemelson, in 2014, issued five critical reports and gave several interviews about Ligand, making hundreds of allegations, including business, accounting, and securities fraud against the company and filing five whistleblower reports. His criticism proved prescient as Ligand’s stock price subsequently fell precipitously.
Lemelson continued publicly criticizing Ligand and the SEC (for their inaction on what he called “The Ligand Fraud”) through 2018, including publishing two open letters to Congress.
For its part, Ligand quietly enlisted a former high-ranking SEC official and a sitting US Congressman (who was later criminally indicted) to “lean on” the SEC to investigate, using baseless allegations against Lemelson. In trial testimony, John Higgins, the former CEO of Ligand, acknowledged that the company's executives wanted Lemelson “silenced for good.”
Eventually, the SEC charged Lemelson with fraud in 2018. Although a jury rejected all of SEC’s fraud allegations, it found that one sentence and one sentence fragment, about a different company that he didn’t trade in, and embedded in his 56 pages of written reports and one two-second comment in an online interview were purportedly misleading.
The U.S. District Court for the District of Massachusetts then held Fr. Lemelson liable for violating the Securities Exchange Act of 1934 and SEC Rule 10b-5. It fined Fr. Lemelson $160,000 and barred him from making similar statements for five years.
About Lemelson Capital Mangement, LLC and Fr. Emmanuel Lemelson
Fr. Emmanuel Lemelson is a Greek-Orthodox Priest, whistleblower, activist investor, and CIO of Lemelson Capital Management, LLC, a private investment management firm focused on deep value and special situation investments.
Follow LCM on Twitter @LemelsonCapital - Follow Fr. Emmanuel Lemelson on Twitter @Lemelson
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For more background, see:
- Motion to Dismiss here (October 25, 2018)
- Reply Brief here (November 21, 2018)
- Opposition to The Securities and Exchange Commission's motion for protective order here (January 7, 2020)
- Affidavit of Religious Affiliation here (March 30, 2020)
- Motion for Summary Judgement here (September 30, 2020)
On July 17, 2018, Fr. Emmanuel released a letter he provided members of The U.S. House Committee on Oversight and Government Reform, The U.S. Senate Special Committee on Aging, and the SEC Office of the Inspector General, further outlining extensive alleged abuses of accounting, pharmaceutical reimbursement, and classification guidelines and regulations by Ligand Pharmaceuticals. In the letter, Lemelson urged the Committees in both the House and the Senate to investigate these alleged abuses and the Securities and Exchange Commission’s (SEC) failure to stop them.
Lemelson's full July 13, 2018, letter to Congress is available online here
His December 2016 letter to the U.S. Senate Special Committee on Aging, regarding the company, is available online here
The Ligand Reports:
- June 14, 2014 - Ligand Pharmaceuticals - Severe competitive threat to key royalty program and “going concern” risk drive 100 percent downside
- July 3, 2014 - Ligand Pharmaceuticals (NASDAQ: LGND): Appendix
- August 4, 2014 - Update: Lemelson Capital Further Increases Short Stake in Ligand Pharmaceuticals (NASDAQ: LGND) as LGND EPS Plunges 76 percent in Q2 2014
- August 14, 2014 - Lemelson Capital Says Ligand Pharmaceuticals’ (NASDAQ: LGND) $225M Debt Issuance Solidifies Company’s Insolvency, Substantially Raises Specter of Bankruptcy
- August 22, 2014 - Ligand Pharmaceuticals (NASDAQ: LGND): Institutional holders wasting no time dumping stock in response to mounting insolvency and bankruptcy risks
The Ligand Interviews:
- Rev. Emmanuel Lemelson of Lemelson Capital Management - #PreMarket Prep for June 19, 2014
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for August 13, 2014
- Rev Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for September 16, 2014
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for October 16, 2014
- Rev. Emmanuel Lemelson, Lemelson Capital Management - #PreMarket Prep for November 18, 2014
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for February 20, 2015
- Rev. Emmanuel Lemelson, Lemelson Capital Management CIO - #PreMarket Prep for March 24, 2015
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for April 27, 2015
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for June 5, 2015
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for August 12, 2015
- Listen to Fr. Emmanuel live discussing The Amvona Fund, LP and his recent letter to the US Senate
Letters to Congress Regarding Ligand:
- December 19, 2016 - Lantern Foundation Founder Urges Senate Committee to Commence Investigation into Ligand Pharmaceuticals
- July 13, 2018 - Rev. Fr. Emmanuel Lemelson Calls on Congress, Office of Inspector General to Investigate SEC Failures
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