A former Bristol-Myers Squibb executive who pleaded guilty to insider trading was sentenced on Wednesday to one year in prison and a $10,000 fine. Robert Ramnarine, 46, a former executive director of pension and savings, bought stock options in three drugmakers that were targeted for acquisition, which yielded more than $311,000 in profits (see this). He faced up to three years in prison and a $5 million fine.
Ramnarine traded even as he was responsible for conducting due diligence into pension and savings plans of three drugmakers being reviewed - ZymoGenetics, Pharmasset and Amylin Pharmaceuticals. Bristol-Myers (BMY) bought ZymoGenetics in October 2010 (see this) and Amylin in June (read here), but passed on Pharmasset, which was bought by Gilead Sciences (GILD) (here is the complaint with details of the trades).
As we reported at the time he was charged, Ramnarine used multiple personal brokerage accounts to illegally trade. Prior to the trades, he conducted Internet research from his office computer to determine whether he could be detected by regulators. The US Securities and Exchange Commission said he searched for such phrases as “can stock option be traced to purchaser” and “illegal insider trading options trace” and viewed articles such as “Ways to Avoid Insider Trading.”
Insider trading, as we have written in past stories, has become an issue for the FDA and drugmakers. More than one in five US insider-trading cases involved health-care stocks, and since 2007, 97 people charged or sued by regulators for insider trading gained an edge thanks to secret info about drugs and devices, according to Bloomberg News. Execs at several drugmakers have been caught in recent years, as well as a former University of Michigan Alzheimer's expert who sold tips to a consulting firm (read more here).
Last spring, former FDA chemist Cheng Yi Liang was debarred for using confidential information about upcoming announcements of 27 different approval decisions involving 19 publicly traded companies over a five-year period. In the process, he generated more than $3.7 million in illegal profits for himself (back story).
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