United States Attorney's Office District of Connecticut
Press Release

HEDGE FUND MANAGER SENTENCED TO THREE YEARS IN FEDERAL PRISON FOR STOCK MARKET MANIPULATION

Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that SCOTT SACANE, age 40, of Weston, Connecticut, was sentenced today by Senior United States District Judge Alan H. Nevas in Bridgeport to 36 months of imprisonment, followed by three years of supervised release. On December 21, 2005, SACANE waived indictment and pleaded guilty to one count of violating the Investment Advisers Act of 1940.

According to documents filed with the Court and statements made in court, SACANE owned and controlled Durus Capital Management, LLC, which managed the hedge funds Durus Life Sciences Fund, LLC, Durus Life Sciences International Fund, Ltd., Durus Life Sciences Master Fund, Ltd., and Artal Long Biotech Portfolio, LLC. From November 2002 through July 2003, SACANE manipulated the price of two biotechnology stocks, Esperion Therapeutics, Inc. ("ESPR") and Aksys, Ltd. ("AKSY"), by concealing massive purchases of ESPR and AKSY through false SEC filings, by failing to make required SEC filings, by making false statements to prevent others from selling ESPR and AKSY, and by making false statements to Esperion and Aksys to prevent the implementation of “poison pill” provisions.

SACANE’s holdings of ESPR and AKSY were disclosed in July 2003 in amended SEC filings, which stated that Durus had “inadvertently” acquired approximately 33% of the outstanding shares of Esperion and nearly 80% of the outstanding shares of Aksys. However, SACANE has admitted that he engaged in a course of business that operated as a fraud and deceit on investors in the Durus funds, by dominating and controlling the market for ESPR and AKSY.

Judge Nevas has scheduled additional proceedings for April 4 and April 5, 2007, in order to determine the restitution that SACANE will be required to pay.

“This prosecution and the term of imprisonment imposed today should send a strong message to hedge fund managers,” U.S. Attorney O’Connor stated. “In order to protect investors and publically traded companies, the U.S. Attorney’s Office and our federal law enforcement partners will actively investigate and prosecute those who attempt to profit through stock market manipulation schemes.”

This case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. The case is being prosecuted by Assistant United States Attorney Edward Chang.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov