Wood River’s Troublesome Investment Liquidated

Jan 14 2008 | 5:32pm ET

The saga of collapsed hedge fund Wood River Capital Management, in which investors lost as much $88 million, is finally over. Two months after founder John Whittier was sentenced to three years in prison defrauding investors and regulators, the investment that ruined the firm has finally been unwound.

Endwave Corp., acting on behalf of Wood River’s investors, liquidated the hedge fund’s 4.1 million share stake in itself, buying more than half of the shares itself. The stake, once worth as much as $220 million, was sold for just $28 million.

Whittier, without investor knowledge or approval, invested the lion’s share of Wood River’s assets in Endwave, a San Jose, Calif.-based radio equipment, taking a big stake in the company. He also failed to inform the Securities and Exchange Commission when the hedge fund’s stake exceeded 5%.

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