Final judgments have been entered by consent against Scott R. Sacane, Durus Capital Management, LLC, and Durus Capital Management (N.A.), LLC (collectively, Durus) in a civil fraud action the SEC filed against them on October 12, 2005.

The SEC's complaint, filed in federal district court in Connecticut, charged that during 2002 and 2003 the defendants were involved in fraudulent schemes concerning the purchase and sale of the common stock of two biotechnology companies: Esperion Therapeutics, Inc. and Aksys Ltd. The SEC's complaint alleged that the defendants manipulated the price of both Esperion and Aksys stock by making regular and substantial purchases of both stocks through the hedge funds that they managed, by concealing these purchases by failing to file various forms and schedules with the SEC as required by law and by making false filings with the SEC. According to the complaint, Sacane also made misrepresentations to the officers of Esperion and Aksys about the stock purchases, and made misrepresentations to Sacane's former employer about purported non-public information Sacane possessed about both companies in order to prevent the former employer from selling Esperion and Aksys stock.

The complaint further alleged that Sacane and Durus later sold stock of both companies without disclosing their ownership position as required by the federal securities laws. The SEC's complaint alleged that the defendants' undisclosed purchases of Esperion and Aksys stock artificially inflated the price of both stocks by creating the appearance of a greater demand for the stocks than actually existed in the market. According to the complaint, from November 2002 through July 2003, Esperion's stock price more than tripled from $5.65 per share to approximately $20 per share, and Aksys' stock price quadrupled from $3.65 per share to approximately $15 per share. By July 24, 2003, the defendants' undisclosed purchases also resulted in them controlling approximately 33% of Esperion's outstanding stock and approximately 78% of Aksys' outstanding stock.

Please click http://www.sec.gov/litigation/litreleases/2007/lr20258.htm  for a copy of the administrative order.