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Insider Trading: Doctor, Sales Manager Settle
December 23, 2011
In separate, but related highly publicized insider trading cases, French doctor Yves Benhamou and California sales manager James Fleishman each was sentenced to prison.
Benhamou, an infectious diseases expert, was sentenced to time served and 3 years of supervised release; he had cooperated with a federal probe and pleaded guilty to leaking secrets to a hedge fund manager about biotech company Human Genome Sciences Inc. Benhamou served as an adviser on a clinical drug trial.
Benhamou spent 24 days in jail after his November 2010 arrest. He also spent about 9 months confined to a NYC apartment separated from his wife, daughters, parents and siblings in France. He also was ordered to forfeit $52K in fees received and to pay $6 million in restitution.
Benhamou was credited during his sentencing in Manhattan federal court with being crucial to the prosecution of one of the most prominent hedge fund managers to become embroiled in an investigation of illegal stock tips solicited from consultants - that was Joseph "Chip" Skowron, who ran healthcare funds at FrontPoint Partners. Skowron, a doctor turned hedge manager, got a 5-year prison sentence after pleading guilty to trading in the stock of HGSI on nonpublic information he received from Benhamou.
James Fleishman, 42, former Silicon Valley sales manager, ... was sentenced to 2-1/2 years, and 2 years supervised release fpr ferrying leaks to hedge funds about revenues or margins from executives of such companies as AMD and Dell. Fleishman had worked for Primary Global Research, a so-called expert networking firm. He did not plead guilty, but was instead convicted by a jury at a September trial in Judge Jed Rakoff's courtroom. In handing down Fleishman's sentence, Judge Rakoff emphasized the need for deterrence.
Benhamou Case. USA v Benhamou, U.S. District Court for the Southern District of New York, No. 11-00336. [Reuters, 12/21/11]

