Doctor Tipped Patient for Inside Trades on Drug, SEC SaysAlan Katz
A pharmaceutical executive, emergency-room physician and one of his patients agreed to pay more than $325,000 to resolve U.S. regulatory claims they made illegal trades based on confidential results of clinical trials for an experimental drug to treat melanoma.
Loretta Itri, chief medical officer of Genta Inc., tipped her longtime friend, doctor Neil Moskowitz, in October 2009 that her company’s key developmental drug didn’t show significant benefits, the Securities and Exchange Commission said in a complaint filed today at federal court in New Jersey. Itri passed along the information one day before the company announced the results publicly.
Moskowitz shared the information with one of his patients, Matthew Cashin, according to the complaint. The two men made about $139,000 in illegal gains by selling their Genta shares ahead of the announcement, which caused the stock to drop 70 percent, the SEC said. Genta filed for bankruptcy in 2012.
“Itri was entrusted with highly confidential information by Genta, but betrayed her duty as an executive allowing a friend to profit,” said Amelia Cottrell, associate director of the SEC’s New York office.
Itri, Moskowitz and Cashin agreed to settle the SEC’s claims without admitting or denying wrongdoing. Itri was also barred from serving as an officer or director of a public company for five years.
“Mr. Cashin is happy to put this incident behind him,” Roland Riopelle, an attorney for Cashin, said. “It was an impulsive act on his part and he regrets it.”
Deborah Colson, a lawyer for Moskowitz, declined to comment. Barry Bohrer, Itri’s attorney, didn’t immediately respond to a phone call seeking comment.