CRF Blog

Health Care’s Epidemic of Insider Trading

by Bill Hayes

Bloomberg Businessweek reports on Health Care’s Epidemic of Insider Trading.

The markets are awash in insider trading, and the health-care industry has been particularly hard-hit. Health-care businesses offer illegal traders abundant opportunities to profit from unpublicized data about earnings and deals. Pharmaceutical companies can live or die on the results of drug trials. And the industry has undergone significant consolidation, leading to several multibillion-dollar mergers. “Health care is particularly attractive to criminals because so much turns on the government regulatory approval,” says Rod Rosenstein, the U.S. attorney for Maryland. “If you have a pending application for a new drug, the difference between yes and no on approvals can be tens or hundreds of millions of dollars.” [more]