FLICKR, CARBONNYCIn November last year, Sidney Gilman, a neurologist then at the University of Michigan in Ann Arbor, admitted to tipping off a hedge-fund manager about clinical trial data yet to be published. Gilman was working for the Gerson Lehman Group, an “expert network” that connects academics with industry clients, often from financial companies, seeking technical information.
Gilman passed on confidential results showing that an Alzheimer’s drug being developed by Wyeth had not worked as well as expected, allowing the hedge-fund manager to sell his stake in the company before the data became publicly available, according to the US Securities and Exchange Commission (SEC). The resulting $267 million in illicit gains was the largest insider-trading case the SEC has ever investigated, and highlights a controversial intersection between academia and high finance, reported Nature.
Since 2009, SEC investigations have led to charges against almost 30 people with connections to expert networks, including Gilman and other biomedical researchers. The companies maintain they do not break the law and have policies in place to prevent illegal activities. Indeed, David Wazer, a radiation oncologist at Tufts ...
