SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17808 / October 28, 2002

   Securities and Exchange Commission v. J. Scott Eskind, Lorus
   Investments, Inc., and Capital Management Fund, Limited Partnership,
   United States District Court for the Northern District of Georgia,
   Civil Action No. 1 02-CV-2429-MHS

   The Securities and Exchange Commission announced that an application
   for an order to show cause why defendants J. Scott Eskind (Eskind),
   Lorus Investments, Inc. (Lorus) and Capital Management Fund, Limited
   Partnership (Capital) (collectively, the defendants) should not be
   held in civil contempt was filed by the Commission on October 8, 2002,
   in the United States District Court for the Northern District of
   Georgia, based on the defendants' failure to provide an accounting, as
   required by the Court's September 12, 2002 preliminary injunction
   order. That order enjoined Eskind, Lorus and Capital from violations
   of Section 17(a) of the Securities Act of 1933, Section 10(b) of the
   Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Eskind
   and Lorus from violations of Section 206 of the Investment Advisers
   Act of 1940. On October 11, 2002, the Honorable Marvin H. Shoob,
   United States District Judge for the Northern District of Georgia,
   entered an Order requiring Eskind, Lorus and Capital to show cause why
   they should not be held in civil contempt for their violation of the
   Court's September 12, 2002 order.

   The Commission's complaint, filed on September 3, 2002, alleged that
   Eskind is a recidivist violator who was preliminarily enjoined in June
   1997 and permanently enjoined on January 12, 1998 from violating the
   antifraud provisions of the federal securities laws. Eskind was
   subsequently barred by the Commission from association with any
   investment adviser. That case was based upon allegations of fraudulent
   conduct by Eskind which included misappropriating investors' funds,
   failing to disclose that Eskind had been suspended by the New York
   Stock Exchange (NYSE) in 1991, and inducing at least five investors to
   invest at least $500,000 in what was falsely represented to the
   investors to be a specified limited partnership. In fact, Eskind had
   been previously terminated from that partnership. The complaint
   further alleged that subsequent to being enjoined, and continuing
   until the filing of the complaint, Eskind raised at least $3 million
   through sales of limited partnership units in Capital. Capital
   purportedly does business by trading in securities through initial or
   secondary public offerings. The sales materials misrepresented to
   investors Eskind's broker-dealer experience, and did not disclose his
   1991 NYSE suspension, the Commission's 1997 civil action or the
   Commission's 2000 order barring him from association with an
   investment adviser. The complaint alleged that investors were told