Scott Sacance has been sentenced to three years in prison and three years of supervised release after pleading guilty to a single count of violating the Investment Advisers Act.
The former owner of Durus Capital Management concealed the purchases of shares through false filings with the Securities and Exchange Commission in a bid to manipulate share prices.
US Attorney Kevin O’Connor explained that by failing to make the necessary SEC filings, Sacance prevented others from selling stocks in two biotech firms.
“This prosecution and the term of imprisonment imposed today should send a strong message to hedge fund managers”, says O’Connor.
Last year, Durus Capital Management chief operating officer J Douglas Schmidt was sentenced to one year probation and given a fine of $10,000 for filing false SEC statements.