A Medical Device Daily

The Securities and Exchange Commission on Friday reported that a Connecticut federal judge has sentenced Scott Sacane, the founder of Durus Capital Management, to three years imprisonment, to be followed by three years of supervised release in connection with charges brought by the U.S. Attorney's Office in New Haven. Sacane in December 2005 pleaded guilty to one count of investment adviser fraud.

In October 2005, the SEC sued Sacane and others, alleging that they manipulated the stock of Aksys (Lincolnshire, Illinois), a developer of home dialysis systems, and Esperion Therapeutics (Ann Arbor, Michigan). It charged that Sacane was an investment adviser to the Durus Life Sciences Fund, Durus Life Sciences International Fund and Durus Life Sciences Master Fund ("the Durus Funds") and that he knowingly and willfully inflated the value of the Durus Funds, thereby garnering increased management fees and performance incentive fees to which he was not entitled.

The court set a hearing date of April 4-5 to determine restitution.

The SEC's civil enforcement action remains pending in federal district court in Connecticut.

Based on Sacane's guilty plea, the SEC previously barred Sacane from association with an investment adviser.

Aksys filed suit in August 2003 to seek injunctive relief and damages arising from the defendants' accumulation of more than 70% of the company's outstanding stock, considered short-swing trades as defined by the SEC.

In early 2004 Aksys reported that Durus Life Sciences Master Fund paid it $4.6 million and related interest payments as settlement of liability with respect to one count of a three-count complaint filed by Aksys against the Durus Fund and other defendants in U.S. District Court in Connecticut (Medical Device Daily, Jan. 16, 2004).

In February 2004 Aksys reported agreeing to a final settlement of outstanding claims against the Durus Life Sciences Master Fund and other defendants. Aksys said at the time that it would receive a payment of $48.7 million, including the purchase by certain defendants of $16.1 million of promissory notes and the earlier $4.6 million settlement payment (MDD, Feb. 26, 2004).

In other legalities: Possis Medical (Minneapolis), a manufacturer of devices used in endovascular procedures, reported that the U.S. District Court for Minnesota has dismissed, with prejudice, the consolidated amended complaint in a shareholder class action suit against Possis and two of its executive officers, titled "In re Possis Medical, Inc., Securities Litigation."

The dismissed suit, filed in June 2005, arose from allegations concerning public statements made prior to the August 2004 public disclosure of Possis' AiMI clinical study results. The case consolidated multiple class actions and, although no class had yet been certified, the court had appointed lead plaintiffs in August 2005.

Possis filed its motion to dismiss shortly thereafter; oral arguments were heard in March 2006.

Robert Dutcher, president/CEO and chairman of Possis, said, "We are very pleased that the trial court has granted our motion to dismiss. Although we have always been firm in our conviction that this suit was without merit, it confirms our confidence in the judicial process to have the court take this action."

Possis' AngioJet system is a mechanical thrombectomy system with FDA approval to remove large and small thrombus from coronary arteries, coronary bypass grafts, peripheral arteries and veins and A-V grafts and native fistulas.