SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17193 / October 16, 2001

Securities and Exchange Commission v. Michael W. Berger, Manhattan Investment Fund Ltd., and Manhattan Capital Management, Inc., Civil Action No. 00 Civ. 0333 (DLC) (HP) (S.D.N.Y)

COURT ENTERS FINAL JUDGMENT AGAINST MANHATTAN CAPITAL MANAGEMENT, INC.

The Securities and Exchange Commission announced today that on October 9, 2001, the Honorable Denise Cote of the United States District Court for the Southern District of New York entered a Final Judgment against Manhattan Capital Management, Inc. ("MCM"), one of three defendants in SEC v. Michael Berger et al. MCM consented to the entry of the Final Judgment without admitting or denying the allegations of the Commission's Complaint. The Final Judgment holds MCM liable for disgorgement of $19,874,735.44 that MCM was paid by the Manhattan Investment Fund Ltd. ("the Fund") in management and incentive fees, and $132,498.24 in prejudgment interest, for a total of $20,007,233.68.

Both MCM and the Fund are the subject of Chapter 11 bankruptcy proceedings pending in the United States Bankruptcy Court for the Southern District of New York. The Final Judgment as to MCM provides that any distribution made by the estate of MCM with respect to MCM's disgorgement liability shall be paid to the bankruptcy estate of the Fund for further distribution to the Fund's creditors in accordance with the provisions of the United States Bankruptcy Code.

In its Complaint filed January 18, 2000, the Commission charged Michael W. Berger, MCM and the Fund with violations of the antifraud provisions of the federal securities laws. The Fund was a hedge fund organized under the laws of the British Virgin Islands that was open to foreign investors and tax-exempt U.S. investors. MCM was the New York-based investment manager of the Fund. Mr. Berger owned and controlled MCM and was its only officer. Through MCM, Mr. Berger directed the investment activities of the Fund. The Commission has asserted that beginning in September 1996, the Fund began to sustain market losses that ultimately totaled over $393 million. At the same time the fund was sustaining these huge losses, Berger was reporting to investors that the Fund was realizing profits of between 12 and 27 percent annually. To hide the Fund's losses, Berger created phony account statements that materially overstated the performance and value of the Fund. The information contained in the false account statements was provided to investors in the fund, and was shared with potential investors.

The Commission's claims against the Fund have been stayed. The Commission continues to actively pursue its claims against Mr. Berger.

Investors or other interested parties should direct any questions to the Chapter 11 Bankruptcy Trustee for the Fund and MCM: Helen Gredd, Esq., c/o Lankler, Siffert & Wohl, 500 Fifth Avenue, 33^rd Floor, New York, New York 10110-3398, telephone (212) 921-8399, fax (212) 764-3701.

For further information, see Litigation Release 16412, January 19, 2000; and Litigation Release 16414, January 20, 2000.