Skip to content
Matt Levine

Drug Trials and Bank Heists

Also bank profitability, money, multilevel marketing, eggless mayonnaise and Bill Ackman.


Back when it was a hedge fund, one thing that SAC Capital did was learn some negative results of a clinical trial of a drug about two weeks before those results were publicly announced, and then sell its stock in the drug company before the announcement. In a narrow sense this was a good trade, and SAC avoided several hundred million dollars of losses by getting out of the stock before the announcement. In a broader sense, this trade led to the end of SAC, which had to pay $600 million to the Securities and Exchange Commission, plead guilty to insider trading, and stop being a hedge fund because of it. Also the analyst responsible for the trade went to prison for nine years