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December 17, 2012
Dr. Gilman's Turn Toward the Inside
Posted by Derek
Remember that story last month about insider trading on the Wyeth bapineuzumab Alzheimer's results? Dr. Sidney Gilman of Michigan is accused of passing on the data and profiting from it. Now the New York Times has some very interesting background:
What is clear is that Dr. Gilman made a sharp shift in his late 60s, from a life dedicated to academic research to one in which he accumulated a growing list of financial firms willing to pay him $1,000 an hour for his medical expertise, while he was overseeing drug trials for various pharmaceutical makers. Among the firms he was advising was another hedge fund that was also buying and selling Wyeth and Elan stock, though the authorities have given no sign they have questioned those trades.
His conversion to Wall Street consultant was not readily apparent in his lifestyle in Michigan and was a well-kept secret from colleagues. Public records show no second home, and no indication of financial distress. Nevertheless, he was willing to share a glimpse of his lifestyle with a 17-year-old student whom he sat next to on a flight from New York to Michigan a few months ago, telling her how his Alzheimer’s research allowed him to enjoy fine hotels in New York and limousine rides to the airport.
This is hard. Experts have real value, and should be able to share the expertise that they've built up. But when these amounts of money are involved, there seems no way to do that without walking through a minefield. I get the impression that Prof. Gilman may have found out the truth of Screwtape's assertion:
"Indeed the safest road to Hell is the gradual one--the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts. . ."
Comments (11)
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College chemistry, 1983
The 2002 Model
After 10 years of blogging. . .
1. bad wolf on December 17, 2012 2:14 PM writes...
"The finest hotels, the fastest limos, the most high-end prostitutes. What I'm trying to say is: stay in school, kid."
Permalink to Comment2. bank on December 17, 2012 4:45 PM writes...
This doesn't seem too complicated to me. Gilman probably broke some promise of confidentiality by revealing what he knew to Moskowitz. And Moskowitz broke insider trading rules. Simple.
As to Gilman sharing expertise, that should be fully permissible, and indeed should be considered a part of his job as an academic researcher, who presumably benefits from public funds. And he should be paid whatever someone wants to pay him for it. He shouldn't, however, breach confidentiality agreements...
Permalink to Comment3. Hap on December 17, 2012 5:07 PM writes...
Lots of professors consulted in grad school - they didn't tell us what they did exactly but people knew where they were and what (roughly) they were doing. If no one knew that Gilman was selling his expertise and insider knowledge, it was probably because he knew that what he was doing was wrong, and expended effort to keep it unknown to others. That scenario doesn't seem to fit a gradual unconscious descent into evil ('no signposts") - he knew where he was going. It was only a question of whether he would manage to complete his shortcut to happiness (of some sort) or whether he would get caught along the way.
Permalink to Comment4. gippgig on December 17, 2012 8:56 PM writes...
Off topic, but should be of interest: www.newscientist.com/article/mg21628950.200-how-human-biology-can-prevent-drug-deaths.html
Permalink to Comment5. researchfella on December 17, 2012 9:50 PM writes...
There's nothing wrong with being a well-paid consultant. What's wrong, is divulging confidential information, whether it be for money or for free.
Permalink to Comment6. Travis on December 17, 2012 11:46 PM writes...
Information is Power which leads to money which is King!!
Permalink to Comment7. Hap on December 18, 2012 8:27 AM writes...
There wasn't anything wrong with consulting and so there wasn't a particular reason to keep it a secret (unless he thought that consulting for A would likely prevent him from running clinical trials for any of its competitors). Keeping secrets takes effort and forethought, and that leads to one to ask "Why?", for which at least one good answer is that you are doing things that could not stand the light of day.
Permalink to Comment8. Teddy Z on December 18, 2012 9:45 AM writes...
I don't see anything wrong here...except for the lawbreaking. That's a problem. But, if you can market your brand (yourself) and make money off of it, good on ya mate.
Permalink to Comment9. luysii on December 18, 2012 10:38 AM writes...
Another slimeball neurologist. Makes me sick. For stories about a few more of the species see.
http://luysii.wordpress.com/2010/08/24/son-of-a-responsibility-you-didnt-know-you-had/
Permalink to Comment10. bmartinmd.com on December 18, 2012 10:56 AM writes...
The COI for an academic physician who consults for the financial industry is huge--even if the physician strictly maintains contractual confidentiality. I see no problem with private physicians lending their insights to financial analysts for big hourly fees (providing that they aren't participating in relevant drug trials). But most academic medical centers participate in one or more pharma-sponsored drug trials, so the risk of ANY faculty member sharing information (even it's supposed to be blinded and/or confidential) with outside parties is just too high. Even the appearance of the risk of information sharing is troublesome. We really have no idea what motivated Gilman to travel down the slippery slope. (Given the fees received, I don't think it was money; perhaps it was the dreaded conceit of knowledge.) But academics must be much more vigilant about appearing to be, if not being, purists. Why U Mich admins didn't catch Gilman's potential COI, given his known simultaneous relationships with pharma and financial companies, remains a mystery.
Permalink to Comment11. dearieme on December 18, 2012 6:53 PM writes...
"fine hotels in New York and limousine rides to the airport": so cheap, eh?
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