Criminal Charges in Drug Insider Trading Scheme

The U.S. Securities and Exchange Commission (SEC) today filed criminal charges against a former SAC Capital Advisors hedge-fund manager related to an insider trading scheme that generated profits and avoided losses of $276 million related to a failed drug trial. The manager purchased and later sold shares in Elan Corp. (NYSE: ELN) and Pfizer Inc. (NYSE: PFE) after receiving information from a consultant ahead of public announcements first touting, then providing negative information related to an Alzheimer drug treatment.

The manager, Mathew Martoma, has been charged with conspiracy to commit securities fraud and two counts of securities fraud, and faces up to 60 years in prison if convicted.

The SEC is also suing investors in CR Intrinsic, the subsidiary of SAC Capital Advisors that Martoma worked for, and a University of Michigan professor who provided Martoma with the insider information. The professor has a non-prosecution deal with the U.S. Attorney's office and has been cooperating with the government during the investigation.

Paul Ausick


Filed under: 24/7 Wall St. Wire, Drug companies, Law, Pharmaceuticals, Regulation Tagged: ELAN, PFE
Read Full Story

Markets

NASDAQ 6,441.24 -14.81 -0.23%
S&P 500 2,504.53 -3.71 -0.15%
DJIA 22,376.03 -36.56 -0.16%
NIKKEI 225 20,347.48 37.02 0.18%
HANG SENG 28,110.33 -17.47 -0.06%
DAX 12,600.03 30.86 0.25%
USD (per EUR) 1.19 0.01 0.53%
USD (per CHF) 0.97 0.00 -0.02%
JPY (per USD) 112.50 -0.04 -0.04%
GBP (per USD) 1.36 0.01 0.66%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.