U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No.19988 / February 2, 2007
United States of America v. Scott Sacane, (United States District Court for the District of Connecticut Criminal No. 3:05-cr-325-AHN)
Securities and Exchange Commission v. Scott R. Sacane, et al. , (United States District Court for the District of Connecticut, Civil No. 3:05cv1575-SRU - Filed October 12, 2005)
Hedge Fund Manager Sentenced to Three Years in Prison for Investment Adviser Fraud
The Securities and Exchange Commission (“Commission”) announced today that on January 30, 2007, a Connecticut federal judge sentenced Scott R. Sacane, the founder of Durus Capital Management, LLC, to three years imprisonment, followed by three years of supervised release in connection with charges brought by the United States Attorney’s Office in New Haven, Connecticut. Sacane pleaded guilty on December 21, 2005, to a one-count information charging him with investment adviser fraud.
On October 12, 2005, the Commission sued Sacane and others, alleging that they manipulated the stock of Aksys, Ltd., and Esperion Therapeutics, Inc. Sacane's guilty plea stems from the same conduct that formed the basis of the Commission’s civil enforcement action. In particular, the Information to which Sacane pleaded guilty charged that Sacane was an investment adviser to the Durus Life Sciences Fund, LLC, Durus Life Sciences International Fund, Ltd., and Durus Life Sciences Master Fund, Ltd. (collectively "the Durus Funds"). The Information further charged that Sacane knowingly and willfully inflated the value of the Durus Funds, thereby garnering increased management fees and performance incentive fees to which he was not entitled.
The Court has set a hearing date of April 4-5, 2007, to determine issues of restitution.
The Commission’s civil enforcement action remains pending in federal district court in Connecticut. Based on Sacane’s guilty plea, the Commission previously barred Sacane from association with an investment adviser.