U.S. Securities and Exchange Commission

Litigation Release No. 17797 / October 22, 2002

United States District Court for the Northern District of Georgia, Civil
Action No. 1 97-CV-1790-CAM

   On October 3, 2002, the Securities and Exchange Commission filed an
   Application for Order to Show Cause why defendant J. Scott Eskind
   (Eskind) should not be held in civil contempt for his violation of the
   Court's January 12, 1998 permanent injunction order enjoining him 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 Section 206 of the Investment Advisers Act of 1940. On
   October 10, 2002, the Honorable Charles A. Moye, United States
   District Judge for the Northern District of Georgia, entered an Order
   requiring Eskind to show cause why he should not be held in civil
   contempt for his violation of the Court's January 12, 1998 order.

   The Commission's application alleged that, subsequent to being
   enjoined, and continuing until the present, Eskind raised at least $3
   million through sales of limited partnership units in Capital
   Management Fund, Limited Partnership (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 New York Stock
   Exchange suspension, the Commission's 1997 civil action or an order
   issued by the Commission in 2000, barring him from association with an
   investment adviser. The application alleged that investors were told
   that IRA accounts had been opened for them at a trust company which
   serves as an IRA custodian. Investors received statements from Lorus
   Investments, Inc. (Lorus), an entity controlled by Eskind, indicating
   their funds in those accounts. In fact, no such accounts were opened.
   The sales materials also falsely stated that a major law firm provides
   legal representation for Lorus.

   Eskind's conduct is also the subject of a civil action, filed by the
   Commission on September 3, 2002 and currently pending before another
   judge of the Court.

   See also (June 25, 1997); and (January 14, 1998); and (September 13,
   2002).

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Modified 10/22/2002