The Securities and Exchange Commission announced that it settled its civil lawsuit against hedge fund Durus Capital Management and its principal, Scott R. Sacane on fraud charges. The judgment includes injunctions against future violations of the federal securities laws.

In a related criminal suit in April, to which Sacane pled guilty, the SEC sentenced Sacane to three years in prison, ordered him to pay $5.7 million in restitution and barred him from an association with an investment advisor.

The SEC complaint, filed in federal district court in Connecticut, said Sacane fraudulently bought and sold stock of two biotech companies, Esperion Therapeutics and Aksys. Specifically, the SEC said he made regular and substantial purchases of the stock in 2002 and 2003 through his hedge fund to artificially drive up the prices and attempted to hide the transactions by failing to file forms and schedules with the SEC even though he held 33% of Esperion’s outstanding stock and 78% of Aksys’ outstanding stock.

During that period, the SEC said, Esperion’s stock skyrocketed from $5.65 a share to $20 a share, and Aksys’ stock rose from $3.65 a share to $15 a share.

The complaint said Sacane misrepresented his purchases to the companies and to the hedge fund and was in possession of non-public information about the two biotech firms that would have prompted the hedge fund to sell its shares.

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