Report: Drug stocks prey for insiders as industry resists change
A Bloomberg News team reported that one in five U.S. insider-trading cases involve health-care stocks, but companies say their policies to prevent abuse are sufficient.
A team from Bloomberg News crunched data and reported that one in five U.S. insider-trading cases involve health-care stocks.
A corresponding Bloomberg survey of 30 health-care companies showed that those companies say their policies designed to prevent abuse are sufficient - or they refuse to publicly discuss the issue at all.
A link to the story is here.
The story said that 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.
Among the companies declining to discuss with Bloomberg their compliance policies are Bristol-Myers Squibb Co. and Abbott Laboratories, each of which has had executives accused of insider trading in the past six months, according to complaints filed by the U.S. Securities and Exchange Commission.
Bill Singer, a former regulatory attorney with the American Stock Exchange who is now in private practice at Herskovits Plc in New York, told Bloomberg that it is "garbage" that drugmakers are doing all they need to do.
"The industry isn't capable or willing to regulate itself," Singer was quoted as saying.