“WASHINGTON (MarketWatch) — The Securities and Exchange Commission said Tuesday it’s suing a hedge-fund manager and a doctor over what it says may be the largest insider-trading scheme ever charged.
The SEC alleged that $276 million in illegal profits or avoided losses were made by investment advisers and their hedge funds, by trading ahead of negative news in July 2008 on clinical trial involving an Alzheimer’s drug developed by Elan Corp. ELN -0.10% and Wyeth, now a Pfizer Inc. PFE +0.02%subsidiary.
Neither company is facing charges. Read related story on Elan-Wyeth trial.
In a suit filed with the U.S. District Court for the Southern District of New York, the SEC alleged that a professor of neurology at the University of Michigan Medical School tipped off a hedge fund run by CR Intrinsic to liquidate $700 million in positions in Elan and Wyeth as well as establish $960 million in short positions against the companies’ shares.”
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