At a time when more than one in five U.S. insider-trading cases involve health-care stocks, the industry’s companies say their policies designed to prevent abuse are sufficient — or they refuse to publicly discuss the issue at all.
Since 2007, 97 people charged or sued by U.S. regulators for insider trading gained their edge as a result of secret information about drugs, devices and the companies that make them, according to data compiled by Bloomberg. Yet most drugmakers among 30 surveyed wouldn’t discuss their policies, and those that did saw no reason for change.
Francois Nader, the chief executive officer at NPS Pharmaceuticals Inc. (NPSP), a biotechnology company, said insider trading is largely confined to “rogue cases from time to time,” a view shared by other executives in interviews. Critics, though, say it is a systemic problem that will undercut investor support if companies fail to step up.
It is “garbage” that drugmakers are doing all they need to do, said Bill Singer, a former regulatory attorney with the American Stock Exchange who is now in private practice at Herskovits Plc in New York. “The industry isn’t capable or willing to regulate itself.” Read full article.
