FORMER FDA DEPUTY DIRECTOR CHARGED WITH INSIDER TRADING (Orthopedics This Week)
FDA INSIDER TRADING SUSPECT COMMITS SUICIDE (Orthopedics This Week)
The FDA regulates billions of dollars of the U.S. economy. The agency's pending decisions about approvals and clearances are closely guarded. If leaked, investors and competitors can gain or lose huge advantages, or worse, public health is impacted.
Most of the time the secrecy works. But a recent prosecution of a former deputy director of the FDA for providing tips on approvals to three hedge fund managers who then made tens of millions off the nonpublic information, reminds us of the importance of a corrupt-free agency.
On June 15, 2016, the Securities and Exchange Commission (SEC) charged two hedge fund managers and the former FDA employee, Gordon Johnston, with insider trading. Johnston worked at the FDA for a dozen years and, allegedly, remained in close contact with the former colleagues while working as vice president of regulatory sciences at the Generic Pharmaceutical Association (GPhA), from which he resigned in 2011 and worked as the group’s representative to FDA.
According to the SEC complaint, “Johnston concealed his separa...
