Sanofi, Celgene execs charged in insider trading ring
Yet another set of drug company executives has perp-walked into court wearing handcuffs. Thanks to a witness wielding an audio recorder--and computer analysis of trading activity--Celgene's ($CELG) director of financial reporting and Sanofi's ($SNY) director of accounting and reporting were among 6 people charged with insider trading.
Celgene's John Lazorchak and Sanofi's Mark Cupo--along with Mark Foldy, a marketing executive at devicemaker Stryker ($SYK)--passed insider info about their company's dealmaking and regulatory developments to friends and family, including the other three defendants.
Apparently, they felt comfortable trading illicit information partly because of their long relationships; Lazorchak and Foldy went to high school with two of the other men charged. Another set of high school friends involved included Lawrence Grum and Michael Castelli, who profited the most from the insider information, prosecutors said, with $735,000 and $640,000 respectively.
But one of the alleged trading ring's members turned, and secretly recorded Grum for the FBI, Bloomberg reports. Investigators won't find out, Grum had told the other participants. "At the end of the day, the SEC's got to pick their battle because they have a limited number and huge numbers to go after," he told a witness cooperating with the agency.
The trading tips involved Celgene's 2007 deal for Pharmion, Sanofi's 2010 Chattem buyout, Celgene's 2010 agreement to buy Abraxis BioScience and Stryker's 2011 plans to acquire Orthovita, the SEC notes. Celgene's decision to withdraw an application for expanded use of its Revlimid drug in Europe also figured in.
Lazorchak has already been fired, a Celgene spokesman told Bloomberg. Stryker told the news service that Foldy "is no longer an employee." Sanofi hasn't yet said whether Cupo is still employed.
- read the Bloomberg report
Stryker employee charged in insider trading ring
Celgene, Sanofi execs charged in yet another insider trading case
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