Originally published March 9 2012
FDA scientist sentenced to five years in prison for insider trading on drug approval knowledge
by Jonathan Benson, staff writer
(NaturalNews) A drug evaluator at the U.S. Food and Drug Administration's (FDA) Center for Drug Evaluation and Research for more than a decade, Cheng Yi Liang, 58, has been sentenced to five years in prison and three years of supervised release for using non-public FDA data to conduct illegal insider trading.
According to reports, Liang generated more than $3.7 million, which he is now being required to forfeit, by accessing confidential documents about new or experimental drugs to which he had access. He then used this information to time precisely when he would make the most profit from their stocks, as well as when to pull out of them to avoid losses.
"Cheng Yi Liang bought and sold stocks based on non-public information, and he tried to conceal his crimes by using the names of friends and relatives," wrote U.S. Attorney Rod J. Rosenstein to Bloomberg in an email statement. "Mr. Liang violated his duty of loyalty to the FDA and profited from inside information."
Liang's investing sprees allegedly took place between July 2006 and March 2011, during which time he paid close attention to when new drug announcements were set to be made, and made his investments appropriately. The lawsuit filed against Liang by the U.S. government alleges that he made an average profit of $135,015 per announcement.
Prior to the official January 21, 2011, announcement that Clinical Data Inc.'s Viibryd drug for depression had been approved by the FDA, for instance, Liang reportedly made $380,000 by purchasing stocks before this information was made public. And in the case of Vanda Pharmaceuticals Inc.'s Fanapt drug for schizophrenia, Liang generated more than $1 million.
Meanwhile, many members of the U.S. Congress routinely engage in insider trader schemes, and virtually none of them are ever questioned about this practice, let alone arrested and jailed for it. House Minority Leader Nancy Pelosi (D-Ca.), Speaker of the House John Boehner (R-Oh.), and Rep. Spencer Bachus (R-Ala.), to name just a few, were all identified in a 2011 60 Minutes segment as being among the many Congressional leaders involved in insider trader schemes (http://articles.businessinsider.com).
"This is a venture opportunity," said Peter Schweizer, a fellow at the Hoover Institution, during the 60 Minutes report about rampant insider trading in Capitol Hill. "This is an opportunity to leverage your position in public service and use that position to enrich yourself, your friends, and your family."
Sources for this article include:
http://www.reuters.com
http://www.bloomberg.com
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