Psst! Former Biotech Exec Pays $616K Fine For Insider Trading

Yet another instance of insider trading by a pharmaceutical industry employee. This time, the US Securities and Exchange Commission says the former InterMune finance vp and controller Bruce Tomlinson has agreed to pay $616,000 after the agency filed a lawsuit accusing him of tipping a friend and former business associate about the progress of a drug for which approval was sought in Europe. Here’s the background, according to the lawsuit: In March 2010, the drugmaker filed paperwork with the European Medicines Agency for its idiopathic pulmonary fibrosis treatment. Seven months later, Tomlinson e-mailed his friend that the regulatory review process appeared "to be moving faster and better" than anticipated and that this affected "company-wide strategic decisions." On the basis of that information, his friend allegedly directed the purchase of 400 call options on InterMune common stock through a brokerage account held in the name of Quorne Limited ahead of a December 2010, announcement that regulators had issued a positive opinion. The price of the options increased over 500 percent on the news, resulting in $616,000 in profits (here is the lawsuit). Insider trading has become an issue for the FDA and drugmakers. More than one in five US insider-trading cases involved health-care stocks, and since 2007, 97 people charged or sued by regulators for insider trading gained an edge thanks to secret info about drugs and devices, according to Bloomberg News. Execs at several drugmak...
Source: Pharmalot - Category: Pharma Commentators Authors: Source Type: blogs