Ex-Bristol Myers Executive Pleads Guilty to Insider Trading
June 11th, 2013 // 1:08 pm @ jmpickett
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An ex-Bristol Myers Squibb top executive pleaded guilty to the crime of insider trading this week. Robert Ramnarine, 46, admitted to buying stock options in several drugmakers that were to be acquired by BMS. This yielded the ex-director of pensions and savings more than $300,000 in profits. He is facing 20 years in prison and a fine of $5 million. He will receive his sentence in September.
Ramnarine was found to be trading even though he was responsible for doing due diligence into savings and pensions plans for three pharmaceutical companies that were under review. These were AymoGenetics, Pharmasset and Amylin Pharmaceuticals. BMS acquired ZymoGenetics in 2010 and Amylin in 2010 as well. It decided to pass on Pharmasset, which instead was purchased by Gilead Sciences.
Ramnarine apparently opened several personal brokerage accounts to do his illegal trading. Before he did the trades, he was doing his Internet research on his own office PC to see if he could be found out by regulators. The SEC discovered that he did Google searches for phrases about whether a stock option purchase can be traced to the original purchaser, and other searches about illegal insider trading. He also read articles about how to avoid insider trading.
Though this is a rather simple, slam dunk case of insider trading, the entire issue has become quite serious in recent years for FDA and pharma. At least one in five of insider trading cases in the US involve health care stocks. Since 2007, 96 people that were charged with insider trading got an edge due to secret information about devices and drugs. Executives at several pharamceutical companies have been caught in the last few years, and also an Alzheimers expert who sold several research tips to a consulting organization.
In March, ex-FDA chemist Cheng Yi Liang was debarred for using restricted information about various drug approval decisions to buy stocks in 20 companies over five years. He made $4 million in profits. He is now in jail.
And last week, the SEC announced that ex-InterMune Finance VA Bruce Tomlinson had agreed to pay back $600,000 after FDA filed a suit that accused him of tipping off a friend about a drug that was about to be approved.
What do you think about this insider trading scandal? We’re rather shocked that this executive went about his crime in such a brazen manner.
