Robert A. Berlacher, Lancaster Investment Partners, L.P., Northwood Capital Partners, L.P., Cabernet Partners, L.P., Chardonnay Partners, L.P., Insignia Partners, L.P., VFT Special Ventures, Ltd., LIP Advisors, LLC, NCP Advisors, LLC, and RAB Investment Company, LLC

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21648 / September 14, 2010

SEC v. Robert A. Berlacher, Lancaster Investment Partners, L.P., Northwood Capital Partners, L.P., Cabernet Partners, L.P., Chardonnay Partners, L.P., Insignia Partners, L.P., VFT Special Ventures, Ltd., LIP Advisors, LLC, NCP Advisors, LLC, and RAB Investment Company, LLC, Civil Action No. 07-cv-3800 (E.D. Pa.) (MSG)

FEDERAL COURT FINDS HEDGE FUND MANAGER LIABLE FOR SECURITIES FRAUD IN CONNECTION WITH PIPE INVESTMENTS

The Securities and Exchange Commission announced today that a federal court on September 13, 2010 found hedge fund manager Robert A. Berlacher, along with several of his investment advisory entities and various hedge funds he managed, liable for securities fraud in connection with the funds' PIPE investments. In entering judgment for the Commission, the Court ordered the defendants to pay, jointly and severally, $352,363.68 in disgorgement. The ruling followed a three-day bench trial in March 2010 in Philadelphia, Pennsylvania, before the Honorable Mitchell S. Goldberg, United States District Judge for the United States District Court for the Eastern District of Pennsylvania.

The Commission's complaint, filed on September 13, 2007, alleged that Berlacher - and his investment advisory entities (LIP Advisors, LLC, NCP Advisors, LLC, and RAB Investment Company, LLC) and the hedge funds he managed (Lancaster Investment Partners, L.P., Northwood Capital Partners, L.P., Cabernet Partners, L.P., Chardonnay Partners, L.P., Insignia Partners, L.P., and VFT Special Ventures, Ltd.) ¢€" made materially false representations to issuers in connection with two unregistered securities offerings that are commonly referred to as "PIPEs" (an acronym for private investments in public equities).

In connection with the February 2004 Radyne ComStream, Inc. ("Radyne") PIPE, the Court found that Berlacher misrepresented in the securities purchase agreement that he did not hold a short position, directly or indirectly, in Radyne securities. Contrary to this representation, Berlacher, after learning about the PIPE, had established a "barrier option" position on a "basket" of securities (i.e., a portfolio of underlying assets), one of which included a short position in Radyne securities. Berlacher's "barrier option" on a "basket" of securities was an exotic derivative product that provided him with leverage and gave him the right to the underlying assets.

Similarly, in connection with the May 2004 International Displayworks, Inc. ("IDWK") PIPE, Berlacher misrepresented in the securities purchase agreement that he had not engaged in any transactions in the company's securities when he had in fact, after learning about the PIPE, established a "barrier option" position that included positions in IDWK as part of its underlying "basket" of securities.

As a result of these material misrepresentations, the Court found that Berlacher, along with his investment advisory entities and the hedge funds he managed, violated Section 10(b), the antifraud provision of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.

The Court found Berlacher and the other defendants not liable for insider trading in connection with the Radyne offering and for fraud in connection with two other offerings. Previously, the Court dismissed the Commission's claim that Berlacher had violated the registration requirements of Section 5 of the Securities Act of 1933.

Additional information about this matter can be found at SEC v. Berlacher et al., Civil Action No. 07-cv-3800 (E.D. Pa. Sept. 13, 2007) (MSG) [Release No. LR-20278] (Sept. 13, 2007).