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Wood River Proceedings
John Whittier, through Wood River Capital Management, LLP and Wood River Associates, LLP managed the Funds and concentrated approximately 65% of the Funds claimed $265 million in one small-cap stock – Endwave Corporation. Mr. Whittier never filed required stock ownership reports when the Funds’ ownership positions crossed 5% and 10% and never advised investors that the Funds positions exceeded the 10% cap the on individual long positions set forth in the Funds’ offering memoranda.
Since mid-July of 2005, the share price of EndWave has declined precipitously, causing large losses in the Funds. On October 13th, 2005, the SEC filed an emergency action against Whittier, the Funds and the management entities alleging that Whittier made material misrepresentations regarding the management and oversight of the Funds and failed to comply with Exchange Act ownership reporting requirements. Whittier consented to an injunction to freeze the assets of the Funds and to the appointment of a Receiver.
The Receiver is currently evaluating how to distribute the remaining assets of the Funds, which primarily consists of a large block of EndWave stock. In addition, a group of investors have initiated a lawsuit against the Funds’ legal counsel (Seward & Kissell), as well as the Funds’ administrator (Trident Financial Services) and American Express Tax and Business Services, Inc.
