The hot M&A trend in the biopharma industry is keeping federal securities regulators hopping with a surge in insider trading cases. The most recent instance deals with a case that started when a director of Chattem told his accountant that Sanofi ($SNY) was about to buy the company.
According to SEC documents, the accountant, Thomas Melvin, took the confidential news to four friends, and they told a few others. And by the time they cashed in their shares, says the SEC, 8 people profited by more than half a million dollars. Four of the 8 have agreed to settle up, paying $175,000 to cover their profits and fines. Lawsuits against four others are proceeding and their lawyer says they vehemently deny the allegations.
A couple of weeks ago the baseball player Eddie Murray settled charges he had profited from insider information in Abbott's ($ABT) 2009 buyout of Advanced Medical Optics. A week ago a former executive at Array BioPharma was forced to settle on a charge that he had cashed in on insider information on a Novartis ($NVS) pact. And a few weeks ago the FBI hauled Robert Ramnarine into federal court, charging the pension exec at Bristol-Myers Squibb ($BMY) made more than $300,000 using his insider info on buyout talks with Pharmasset, ZymoGenetics and Amylin.
- here's the story from The New York Times
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