The Securities and Exchange Commission announced today that on September 1, 2004, it filed a complaint against Rodney E. Dausch ("Dausch") and Thomas O. Oesterling ("Oesterling"). Dausch is a former Chief Financial Officer of Gliatech, Inc. ("Gliatech"). Oesterling is a former Chief Executive Officer, President and Chairman of the Board of Directors of Gliatech. Gliatech was a pharmaceutical company located in suburban Cleveland. The complaint alleges that in the summer of 2000, Oesterling and Dausch learned of material information that they failed to disclose in Gliatech's Form 10-Q for the period ended June 30, 2000, filed with the Commission. Specifically, Dausch and Oesterling failed to disclose data integrity problems with a clinical study of Gliatech's primary product, Adcon-L Anti-Adhesion Barrier Gel (Adcon-L). Adcon-L is a gel-like substance used to reduce scarring following back surgery. These data integrity problems played a significant role in the collapse of merger discussions between Gliatech and Guilford Pharmaceuticals, Inc., and in the resulting decline in the price of Gliatech's stock. The complaint alleges that as a result of their failure to disclose the integrity problems in Gliatech's Form 10-Q, Dausch and Oesterling violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The complaint also alleges that Dausch and Oesterling aided and abetted Gliatech's violations of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. The Commission is seeking an order that: permanently enjoins Dausch and Oesterling from violating the antifraud provisions and aiding and abetting Gliatech's violations of the reporting provisions of the federal securities laws; requires defendants to pay a civil penalty; and bars Oesterling from serving as an officer or director of any issuer required to file reports with the Commission (officer and director bar).

Simultaneously with the filing of the Commission's complaint, Oesterling consented, without admitting or denying the allegations in the Commission's complaint, to the following relief:

a permanent injunction against future violations of certain antifraud and reporting provisions of the federal securities laws;

a civil penalty of $25,000; and

a two year officer and director bar.

The Commission acknowledges the assistance of the National Association of Securities Dealers and the Food and Drug Administration in this matter.