Congress probes Merrill alert on FDA's ImClone ruling By Allen Wan
My comments ----- analysts really being watched now. This will send a message. The analyst said there was "speculation" and then later admitted, it was based on an "analystical question". In other words, his own speculation and assumption.
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Congressional investigators are examining how a Merrill Lynch (MER: news, chart, profile) biotech analyst speculated that federal regulators might deal a major setback to ImClone (IMCL: news, chart, profile) before there was any public disclosure, the Wall Street Journal reported, citing people familiar with the probe. Merrill analyst Eric Hecht on Dec. 27 alerted his firm's brokers -- and therefore its clients -- that there was "speculation" that the FDA might refuse to accept ImClone's application for the drug Erbitux. On Dec. 28, the FDA formally rejected ImClone's application to market the drug, sending Imclone stock into a tailspin. Hecht said in an interview with the Journal that he "didn't know they (ImClone) were going to receive" a refusal to file letter and his decision was based on a "reasonable analytical question, since the 60-day notice was approaching." Martha Stewart, head of Martha Stewart Living Omnimedia (MSO: news, chart, profile), is also being investigated for possible insider trading as a result of shares of ImClone she sold just prior to the FDA ruling. She has denied the allegations. |
