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June 3, 2011
More Insider Trading at the FDA?
Today's Wall Street Journal has the news that the Liang insider-trading case may not be the end of the story at the FDA. The SEC has amended their complaint against Liang, adding another company's stock and another relief defendant (Liang's 87-year-old father in Shanghai, who also had his name on a brokerage account). Here's a chart of his trading, for those who are interested - make note that he did manage to lose money twice, on Pozen and Mannkind, but otherwise he hit 'em over the fence, time after time, in a most unnatural manner. (The chart also backs up my earlier speculation that Liang's trading in Vanda was what rang the alarm bells - it's far and away the biggest on the whole list).
But the Journal says that "people familiar with the case" think that Liang may have involved several other federal employees. The word is also that the insider trading may have begun well before 2006, and run to a lot more money than has been totaled so far. This might account for the delay in hearing the case - it could well be that the SEC is trying to get Liang to implicate more people as part of a plea-bargain deal. Another scientist at the FDA is apparently involved, according to the paper's sources, but that's all anyone is saying.
Rather weirdly, Liang appears to have refinanced his house ten times in the last few years - four times in as many months at one point - and taken out $350,000 in equity lines against the property. I'm not sure if he was rounding up more capital for his trading business or what. . .
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