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- Canada's CIBC Completes $5Bn PrivateBancorp Buy
- Word ‘Women’ Literally Never Appears in U.S. Senate’s 142-Page Health-Care Bill
- Stephen Pierce, Goldman Sachs Global Head of Equity Markets, To Retire
- Al Gore 'Not Very Smart,’ But Became Filthy Rich Using Simple Investing Formula - Charlie Munger
- U.S. Regulators, Lawmakers Support Volcker Rule Revamp at Hearing
- Morgan Stanley Opts for Frankfurt as New EU Hub
- A New Risk for Goldman, Morgan Stanley in Stress Tests (subsc reqd)
- A Trump Bump for Law Firm of President’s Lawyer - Kasowitz Benson Torres
- JPMorgan, BofA, Goldman, Citi, Wells Fargo Pass Fed's Stress Test
- Blackstone Stock Still Trading at $31 - Its IPO Price From 10 Years Ago
- NJ Resident and NY-Based Global FX Club Charged with Solicitation Fraud, Misappropriation - CFTC
- Senate Republicans Release Plan to Replace Obamacare - The Details
- Berkshire Hathaway Throws $1.5Bn Lifeline to Canada's Home Capital
- Inside Nomura: Day in the Life of a Junior Banker
- Inside Travis Kalanick’s Resignation as Uber’s C.E.O.
- Creative Planning, KS Investment Firm, Spurring Change on Wall Street
- SEC Obtains Judgment Against Attorney Who Defrauded Escrow Clients
- SEC Files Fraud Charges Against Stock Promoters in Market Manipulation Scheme
- Power Lunches and Dinners in New York, London, Washington
- Banks to Cut $1.2Bn in Research Spending, Analyst Jobs - McKinsey
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NEWSLETTERS & ALERTS
SEC Foils Insider Trading Scheme Involving Confidential Government Info
The SEC announced charges against 4 individuals in an alleged insider trading scheme involving tips of nonpublic information about government plans to cut Medicare reimbursement rates, which affected the stock prices of certain publicly traded medical providers or suppliers. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced related criminal charges.
Named in the SEC complaint were: [see below for more complete profiles]
- David Blaszczak, a former government employee, who now runs Precipio Health Strategies, a consulting firm he founded.
- Christopher Worrall, a health insurance specialist in the government’s Center for Medicare Services (‘CMS’).
- Ted Huber, a Partner on the Private Transactions team at Deerfield, a hedge fund advisory firm.
- Jordan Fogel, a former Partner at Deerfield, who now runs Elinem Management, a firm he founded.
A fifth individual was named in the federal indictment that was unsealed today in a Manhattan courtroom: Rob Olan. a Partner at the Deerfield hedge fund.
ACCORDING TO THE SEC COMPLAINT, … David Blaszczak obtained key confidential details about upcoming decisions by the CMS from his close friend and former colleague at the agency, Christopher Worrall. Worrall tipped Blaszczak about at least 3 pending CMS decisions that affected the amount of money companies would receive from Medicare for services or products related to cancer treatments or kidney dialysis.
Blaszczak, in turn, tipped 2 partners - Theodore Huber and Jordan Fogel - at Deerfield, that paid him as a consultant. Huber and Fogel used that information to recommend that the firm trade in the stocks of 4 health care companies whose stock prices would likely be affected by the decisions once CMS announced them publicly. Those trades netted more than $3.9 million in illicit profits.
For his tips, Blaszczak’s firms were paid at least $193,000 in a 19-month period by the hedge fund where the analysts worked.
Prosecutors said the scheme ran from 2012 to 2014. The SEC, which seeks disgorgement of ill-gotten gains plus interest and penalties, is continuing its investigation.
DAVID BLASZCZAK. According to his LinkedIn profile, Blaszczak is partner of Precipio Health Strategies, which he founded in 2013. Prior to that, he was with: (i) Potomac Research Group, Washing Research Group, and CMS (2000-2005).
CHRISTOPHER WORRAL. A health insurance specialist in the government’s Center for Medicare Services, where the leaks allegedly originated.
TED HUBER. According to his profile on the Deerfield website, Huber is a partner on the Private Transactions team at Deerfield, which he joined in 2005. He provides extensive research and analysis on individual companies operating in the healthcare industry. Prior to joining Deerfield, he was with: (i) Wachovia Securities; and (ii) medical technology company Nellcor.
JORDAN FOGEL. According to his LinkedIn profile, Fogel is a portfolio manager with Elinem, a firm he founded in 2016. Prior to that, he was with: (i) Deerfield (2006-2016); (ii) Credit Suisse; and, (iii) ASCOA.
ROB OLAN. According to his profile on the Deerfield website, Olan is a partner on the Devices team at Deerfield which he joined in 2002, He provides extensive research and analysis on individual companies operating in the healthcare industry. Prior to that, he was with: (i) JPMorgan; and, (ii) Hambrecht & Quist.