Feds Bust FDA Approval Insider-Trading Ring

Source: NY Post

Jun 17, 2016

The Securities and Exchange Commission announced insider trading charges against three hedge fund managers and their source, a former Deputy Director of the FDA Office of Generic Drugs.

The group pocketed $32 million via hedge funds investing in health care securities by gaining advance word from the FDA on generic drug approvals.

According to court documents, Sanjay Valvani, a hedge fund manager at Visium Asset Management, obtained non-public information from former FDA official Gordon Johnston regarding drug approvals, including the upcoming approval of enoxaparin, an anti-blood-clotting drug.

According to the charges, Johnston relied on information from former colleagues on upcoming and non-public generic drug decisions. Johnson has pleaded guilty.

Stefan Lumiere, a second Visium portfolio manager, was also named in the criminal indictment. Visium money manager Christopher Plaford has pleaded guilty to mismarking securities and will testify against Lumiere.

Read the NY Post article