A Polite (And Partial) Dissent — To Jim Edwards’ Latest Piece. . . .

That gentleman, Jim Edwards writes, this afternoon that:

. . . .A recent insider trading case regarding executives at Sequenom might have given you the impression that illegal stock trades in the drug business occur when folks inside a company realize big news is coming up and leak it to their friends ahead of time. But the feds’ recent sweep of insider traders in the healthcare business — uncovering unfair trades related to the stock of Pfizer, Merck. . . among others — shows that it is investment banks and hedge funds that drive most insider trading in healthcare, not executives inside pharmaceutical companies. . . .

While I agree in general, this latest round has — thus far — focused on the leaks from banks and expert network advisors and consultants, let’s not forget the (alleged) contribution of one James W. Self (late of Merck vaccines).

Mr. Self is, and remains, presumed innocent — until his trial (or consent decree) is completed, but he was (until he suddenly retired, the day that he was named by the SEC) in charge of business development (primarily deal-doing), in the vaccines business at Merck.

It looks like his connection was through the Galleon investigation, but that is where (supposedly) most of this all began, for Preet Bharara, the U.S. Attorney for the Southern District of New York. So, in at least one case — it was an executive in pharma (allegedly). [I guess the case of Arthur Cutillo wouldn’t technically count here, either.]

We’ll keep you posted — but Jim Edwards also neglects to mention that JP Morgan actually advised Merck (and rendered a fairness opinion to its board) in the March 2009 mega-deal (a deal process that is almost universally suspected of springing various information leaks between late February 2009, and early March of that year).


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