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Securities regulators are probing the role Scott Sacane's hedge fund played in the unusual trading activity in two small healthcare stocks.

The dual inquiries, by the

Securities and Exchange Commission

and the

Nasdaq Stock Market

, were disclosed late Thursday in a quarterly filing by



, one of the companies that Sacane's Durus Capital Management "inadvertently" took a huge stake in.

News of the probes will come as little surprise to those on Wall Street who have looked with scorn at Sacane's claim that his fund's acquisition of millions of shares in Aksys and

Esperion Therapuetics

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over the past six months happened by mistake. At last count Sacane held 77% of Aksys and 33% of Esperion.

Hedge fund managers and securities lawyers say they can't remember a similar situation, and some critics are dubious that a savvy money-runner like Sacane would come to own that much stock -- or fail to disclose such transactions -- by mistake.

Aksys, a manufacturer of dialysis machines, said it had received requests for information about "the Durus matter" and was cooperating with regulators. An SEC spokesman declined to comment on the inquiry, and a Nasdaq official couldn't be reached for comment. A spokesman for Sacane also could not be reached for comment.

Already, Sacane and Durus are facing a lawsuit from Aksys, which is trying to collect any short-term trading profits Sacane may have reaped from trades in its stock. The company's claim rests on a seldom-invoked securities law that prohibits 10% holders from profiting on short-term trades. Earlier this week, Sacane replaced his longtime corporate lawyer, William Natbony, with trial attorney Matthew Dontzin, who has represented Def Jam Records Chairman Lyor Cohen.

Esperion, a cardiac drug manufacturer, has not yet decided whether it will also sue Sacane. Both Esperion and Aksys have reached agreements with Sacane that bar him and his hedge fund from selling any shares for the next four to six months.


has reported previously that another investment fund with close ties to Sacane was selling most of its shares in those two companies during the same period Durus was mostly buying up stock in Aksys and Esperion.

Filings with the government show that Perseus, a Washington-based fund headed by investment banker and publishing magnate Frank Pearl, unloaded 1.15 million shares of Esperion and 1.1 million shares of Aksys during the first half of this year.

The selling by Perseus, which claims a number of Washington power brokers, including former U.N. Ambassador Richard Holbrooke, on its board, coincided with a triple-digit percentage runup in the prices of both stocks.

The timing of stock trades are of interest because for several years Sacane had been a Perseus portfolio manager and also managed the Perseus-Soros BioPharmaceutical Fund, a $400 million joint venture between Perseus and Soros Fund Management. Several sources said Sacane, who started Durus in November 2001, formally severed his ties with Perseus and the Perseus-Soros fund at the end of 2002.