by ilene - October 30th, 2009 4:58 pm
Courtesy of Lawrence Delevingne at Clusterstock
Amgen has responded to the charges of corruption and fraud related to its big anemia drug, Aranesp, made by New York Attorney General Andrew Cuomo today along with 14 other states.
Amgen spokesman David Polk told us "We believe that the allegations are without merit, and we look forward to the opportunity to examine these matters with the states before the Court."
Polk adds: "Because this lawsuit is now in litigation, we are limited in our remarks," and that "Amgen has a solid compliance program and Code of Conduct called “Do The Right Thing,” and we expect that all of our employees follow it at all times."
AMGN was down 0.56 today, or -1.03%.
See also Lawrence Delevingne’s earlier entry:
Breaking from the New York Attorney General’s Office:
NEW YORK, NY (October 30, 2009) – Attorney General Andrew M. Cuomo today announced that New York and 14 other states are filing a lawsuit against Biotech giant Amgen following an investigation spearheaded by
his office into a nationwide kickback scheme to boost drug sales.
In a lawsuit filed today in federal court the states charge drug manufacturer Amgen, International Nephrology Network (INN), a specialty group purchasing organization, and ASD Healthcare, a wholesaler, with offering kickbacks to medical providers to increase sales of Amgen’s anemia drug, Aranesp.
“Drugs should be prescribed to patients on the basis of need, effectiveness, and safety, not on a corporate giant’s promise of an all-expense paid vacation,” said Attorney General Cuomo. “In an egregious violation of the law, Amgen allegedly bribed medical providers and left taxpayers footing the bill for free drug samples. My office’s Medicaid Fraud Control Unit will continue to work with our partners in other states to uncover these kinds of abuses.”
According to the multi-state complaint, the companies would encourage medical providers to bill third party payers such as Medicaid for free Aranesp that were provided at no cost. Amgen is further alleged to have conspired with INN and ASD Healthcare to offer illegal kickbacks to medical providers, such as sham consultancy agreements, weekend retreats, or other services to induce them to purchase and prescribe Aranesp with the intention and effect of increasing sales of Aranesp and converting new providers from competitor drugs to Aranesp.
As a result…
Tags: Amgen, Andrew Cuomo, corruption, Crime, Litigation, Pharmaceutical, regulation, white collar crime
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by ilene - October 20th, 2009 1:39 pm
Courtesy of John Carney at Clusterstock
The tiny investor relations firm that allegely provided the tip that brought Galleon Group its most profitable illicit trade was started by a Goldman Sachs institutional sales vice president.
Prosecutors have alleged that before Google announced a shortfall for its earnings in July 2007, a tipster told Galleon the company would miss analyst expectations. That information received from an unidentified Market Street Partners employee. The Market Street employee expected to be richly compensated for providing the tip.
This has started a guessing game about who might have been behind the leak. The person had to have connections to someone in a position to pass on the tip to Galleon’s founder Raj Rajaratnam. You don’t exactly call a stranger and offer an illegal tip in exchange for cash.
Joann Horne, one of the co-founders of Market Street Advisors, worked at Goldman for five years from 1994 to 1999. As a vice president in institutional sales she would have worked losely with portfolio managers, analysts, and traders. In 2000, she co-founded the investor relations firm with Carolyn Bass.
It seems far fetched to imagine that Horn would be behind the leak however. For one thing, she is much more than an "employee" at the firm. More importantly, it seems likely that such a leak and demand for payment would come from a shorter term employee rather than someone with a long term interest in the health of the financial firm.
Still, we’re sure the more easily enraged critics of Goldman Sachs will be pleased to know that the Vampire Squid also has its tentacles in the Galleon insider trading scandal. Goldman was not immediately available to comment on this tentacle.
Market Street is virtually unknown. "Employees at the neighboring offices described Market Street as being quiet and small, with employees preferring to take the stairs rather than the elevator," Reuters reports. "The median age is 32, according to LinkedIn data." LinkedIn lists five current employees: Horne, Bass, Vice President Linda Rothemund, Vice President Karen Haus, and analyst Daniel Wood.
We can cross Rothemund and Wood off the list of potential suspects because they weren’t at the firm in July 2007, when the Google
…
Tags: Crime, Goldman Sachs, Hedge Funds, insider trading, Investing, Markets, Raj Rajaratnam, Wall Street
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by ilene - October 16th, 2009 6:44 pm
Courtesy of John Carney at Clusterstock
Traders at hedge funds and Wall Street trading desks are quaking over the news that the FBI tapped the phone lines of Galleon founder Raj Rajaratnam.
The news that the government is (finally) employing techniques typically used against organized crime or international drug cartels is raising fears about who might be next.
We spoke to traders at two prominent hedge funds who both described the feeling at their firms as “panicked.”
“Suddenly you are wondering about every conversation you’ve had about a public company, wondering if the Feds were listening in,” one trader said.
Traders spend a lot of time exchanging information with colleagues and reaching out to people in the industries they cover in hopes of gaining an edge. Rumors, gossip and loose talk are their bread and butter.
Most of this is fair game. But if the ultimate source is an insider or the news is about a major deal that has yet to be announced, the trader can step into dangerous legal territory.
Even when traders learn inside information, there is usually little chance of getting caught. The SEC watches unusual trading activity but an active trader will usually get a pass if he’s buying or selling stocks that he usually trades in anyway.
Even those cases that do come up are hard to prosecute, especially if no one confesses. So occasional civil cases are brought but almost no criminal cases emerge involving traders.
This case shattered that pattern because the government used the tools it uses against hardcore drug criminals and terrorists to uncover the alleged insider trading.
Traders are now living in a very different world. Legally speaking, trading is far more dangerous than anyone knew.
See Also:
Raj Rajaratnam Funded Sri Lankan Terror Group
Galleon "Shocked" By Raj Rajaratnam Arrest
Will Raj Rajaratnam Spend 200 Years In Jail?
Previously, John Carney reporting:
Prosecutors and the FBI have announced that they have filed charges against several people involved with the Galleon Group hedge fund, including founder Raj Rajaratnam. Galleon is a major hedge hund player known for its investment in technology stocks…
Most notably, the government is filing criminal…
Tags: Crime, Galleon, Hedge Funds, indictment, insider trading, Legal, Raj Rajaratnam, regulation, Scams, SEC, stocks, Wall Street
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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