The Securities and Exchange Commission charged Gregory Lemelson and Massachusetts-based Lemelson Capital Management LLC with fraud for allegedly illegally profiting from a scheme to drive down the price of San Diego-based Ligand Pharmaceuticals Inc., /zigman2/quotes/202030140/composite LGND +3.03% by taking a short position on behalf of The Amvona Fund, a hedge fund he advised and partly owned and then issuing false information about Ligand. The SEC alleges Lemelson used written reports, interviews, and social media to spread untrue claims, including that Ligand was "teetering on the brink of bankruptcy" and that Ligand's investor relations firm agreed with his view that its flagship Hepatitis C drug, Promacta, was going to become obsolete. Lemelson also allegedly misled investors by citing a European doctor's negative views on the same Ligand drug without revealing the doctor was Amvona's largest investor and had a significant financial interest in seeing Ligand's stock price decline. According to the SEC's complaint, Ligand's stock lost more than one-third of its value during the course of Lemelson's alleged scheme. Short-sellers profit when the price of stock declines. Lemelson collected more than $1.3 million in trading profits for the adviser and the hedge fund. The complaint names the Amvona Fund as a relief defendant and seeks to have it return gains it obtained as a result of Lemelson and his firm's alleged misconduct.