Another story about Dreyfus/Schonberg, that mentions CCSI:
biz.yahoo.com
The Dreyfus suits focus on Schonberg's personal stake in Chromatics Color Sciences International Inc. (CCSI - news), a small company that develops products for medical and cosmetic applications. The suits came after the Securities and Exchange Commission (SEC) and the New York Attorney General had begun to investigate Schonberg's dealings.
Schonberg bought at least 20,000 Chromatics shares in a private offering managed by brokerage Janssen-Meyers Associates in 1995 for $2.50 a share, the lawsuits claim. He later started buying the shares for the funds he managed.
By March 31 this year, Dreyfus' funds held a total of 1.5 million Chromatics shares, or about 11 percent of the company's outstanding stock, SEC filings show. Of that amount, the Premier Aggressive Growth fund alone held 1.1 million shares, or eight percent of Chromatics' outstanding stock. The Chromatics holding comprised over five percent of the fund's $264 million assets under management at the time.
Schonberg's alleged personal interests acted in harmony with the funds' for some time, as Chromatics' stock soared to a high of $18 in late April from a low of $2 in May 1997.
''The only reason I believe (that happened) is because of the purchases by the fund,'' Kodroff said. ''The fund couldn't cash out because, if it sold, the stock price would collapse.''
Chromatics' stock did plummet in early June, after short seller Asensio & Co Inc. claimed that one of its products did not sport any new technology. A June 9 SEC filing also showed the Dreyfus funds had heavily sold Chromatics stock in the second quarter, pairing their holdings to 762,000 shares.
Two months before the Chromatics crash, Dreyfus had replaced Schonberg as the primary manager of the two funds. Schonberg, however, would remain active in the funds' management and continued ''to be a valuable member of the Dreyfus investment management team,'' Dreyfus said at the time. |
