Health Law

PHYSICIAN FINGERED IN INSIDER TRADING FRAUD

By Greg Piche'

Police arrested Dr. Yves M. Benhamou,  a French physician,  in Boston recently, charging him with leaking information to Front Point Partners a hedge fund owned by the investment bank, Morgan Stanley.  Benhamou, one of five physician overseeing a clinical trial of the drug Allbuferon developed by Human Genome Sciences, Inc. for the treatment of Hepatitis C. He  is alleged to have tipped off Front Point that there were problems involving the death of several patients in the trial.  Dr. Benhamou was apparently on retainer as a medical consultant to the hedge fund, while he was overseeing the clinical trials. Its kind of like having your mother on the jury. Chris Skowron, a doctor employed by Front Point to oversee its health care investments, is on administrative leave.

This case is vaguely reminiscent to the Martha Stewart case where insider  Samuel D. Waksal, tipped off family members and, Martha?s broker that the ImClone drug, Eurbitux, a monoclonal antibody designed to fight cancer was going to be denied FDA approval. Wasal is recently out of prison and back in the high tech biologic game.  There continues to be much to be gained through insider information on drug trials, which seems to justify the risk for some.  Front Point dodged a 30 Million dollar loss through its early sale of HGS stock. Perhaps Dr. Benhamou  can solicit some tips from Martha Stewart on appropriate future residential decorations. What goes well with cinder blocks and steel? See Strasburg & Eaglesham, ?Insider Case Alleges Doctor?s Tips,? The Wall Street Journal, November 3, 2010.

Full post as published by Healthcare Law Blog on November 04, 2010 (boomark / email).