Hedge fund manager Scott Sacane was sued by a small medical-products company in which he amassed a 70% stake through a series of frenetic and undisclosed trades.
brought suit in Connecticut against Sacane and his Durus Capital over the trades, which Sacane has described in government filings as "inadvertent."
The company wants injunctive relief for what it alleges were violations of both securities laws and a standstill agreement between Aksys and Durus. It will also try to collect money under an obscure regulation that requires the surrender of short-term trading profits to a company if a trader owns more than 10% of its outstanding stock.
Aksys said that it "felt that given the extraordinary nature of the circumstances it was prudent to move forward with legal action. By taking these steps, we remain committed to protecting the best interests of all of our shareholders."
Sacane made what appeared to be his first public comment about the blowup, saying in response to the suit that Aksys management had "assured that they intend to work cooperatively with us to resolve this issue."
"We are committed to our investment in Aksys and believe in the soundness of its long-term prospects," he added.
Aksys is one of two firms in which Sacane claims to have mistakenly run up big stakes
without reporting them to regulators. The other is
, which despite Durus' involvement was able to sell a 4 million-share follow-on offering last Wendesday. Esperion has also threatened a lawsuit.
Both companies' share prices rose sharply in June and July, then fell sharply when Sacane's holdings came to light. Sacane has since agreed to a six-month lockup with Esperion.