Connect with us

Hi, what are you looking for?

Economy

Pfizer cannot recoup $75 million from SEC insider trading settlement, judge rules

By Jonathan Stempel

NEW YORK (Reuters) -A federal judge on Tuesday rejected Pfizer (NYSE:PFE)’s bid to recoup about $75.2 million left over from a U.S. Securities and Exchange Commission insider trading settlement with billionaire Steven A. Cohen’s former hedge fund SAC Capital Management.

U.S. District Judge Victor Marrero in Manhattan said Wyeth, a drugmaker Pfizer bought in 2009, did not qualify as a victim of the securities violations underlying the SEC case, and therefore was not entitled to the funds.

Marrero directed that the money be paid to the U.S. Treasury, which the SEC had requested.

Pfizer and its lawyers did not immediately respond to requests for comment.

The dispute stemmed from a $602 million civil settlement tied to trading in Wyeth and drugmaker Elan by Mathew Martoma, who worked at an SAC unit and was later convicted, based on a neurologist’s tips about a 2008 Alzheimer’s drug trial.

SAC pleaded guilty to fraud in 2013 and paid $1.8 billion in settlements with the SEC and other authorities.

The SEC had $75.2 million left over after compensating Wyeth and Elan investors for their losses. Pfizer said it deserved that money because the neurologist, Sidney Gilman, breached a fiduciary duty to Wyeth, where he was a consultant.

But the judge said the reputational harm that Wyeth suffered from the scandal did not mean it also suffered financial harm.

“The court certainly agrees that corporations whose secrets are misappropriated for insider trading purposes are generally victims of wrongdoing,” he wrote. “But Pfizer has failed to allege how the insider trading scheme and Wyeth’s subsequent reputational harm qualifies as pecuniary harm for purposes of distributing the disgorged funds.”

Marrero added that a $7 billion decline in Wyeth’s market value following the drug trial had nothing to do with the insider trading scheme, which became public three years later.

Cohen was not criminally charged, but accepted a two-year ban on managing outside money to end an SEC probe into his supervision of Martoma.

He changed SAC Capital’s name to Point72 Asset Management in 2014, and stopped trading for that fund in September. Cohen is worth $21.3 billion according to Forbes magazine.

The case is SEC v CR Intrinsic Investors LLC et al, U.S. District Court, Southern District of New York, No. 12-08466.

This post appeared first on investing.com

You May Also Like

Investing

In the days since President-elect Donald Trump won the presidential race, Nicole Bivens Collinson’s phone has barely stopped ringing. Collinson, who helps lead the...

Investing

Netflix’s cheaper, ad-supported tier has reached 70 million global monthly active users two years after it was launched. The company said Tuesday more than...

Editor's Pick

Adani Group shares experienced a rebound on Monday, recovering from last week’s steep losses sparked by U.S. criminal charges against Chairman Gautam Adani and...

Stock

Investing.com – Trip.com ADR (NASDAQ: TCOM) reported third quarter EPS of ¥7.05, ¥0.12 better than the analyst estimate of ¥6.93. Revenue for the quarter...



Disclaimer: Techreportdiversity.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


Copyright © 2024 Techreportdiversity.com