Thursday August 15, 4:26 pm Eastern Time
Dow Jones Business News
Ex-Biotech Employee Settles SEC Insider-Trading Case
By Judith Burns, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A former Genentech Inc. (NYSE:DNA - News) computer programmer who allegedly
traded on inside information about a clinical drug trial has agreed to settle a Securities and Exchange Commission suit,
the SEC announced Thursday.
Lei Wang, 32, of South San Francisco, Calif., didn't admit to or deny the SEC's
allegations, but agreed to a court order barring her from future violations and to repay
more than $76,000 of allegedly ill-gotten trading gains and penalties.
The case stems from a clinical drug trial with Xoma, Ltd. (NasdaqNM:XOMA - News),
, another Bay Area biotechnology company, which developed Xanelim, an anti-psoriasis
drug that Genentech planned to manufacture and distribute, subject to approval from the
Food and Drug Administration.
Wang allegedly found negative results in the course of analyzing computerized test
data. The SEC said she sold more than 4,000 shares of Xoma stock outright and sold
an additional 14,407 shares short. Short sellers profit when a stock price declines.
Xoma stock dropped 42% in April when the drug trial results were publicized, allowing
Wang to reap more than $50,000 of illegal profits, the SEC said.
Although the SEC typically requires individuals who profit on insider trading to pay a
fine equal to their profits, it didn't insist on that in Wang's case, citing her significant
assistance in the investigation.
"Miss Wang came forward early in our investigation and cooperated," said Robert
Mitchell, assistant district administrator in the SEC's San Francisco office. "We tried to
recognize that cooperation by requiring a penalty less than what we would usually seek."
Wang wasn't represented by an attorney and a telephone listed in her name has been disconnected.
Genentech cooperated fully with the SEC and was never the focus of the investigation, said company spokeswoman Stephanie Ashe. She said Wang was
an independent consultant and no longer works for Genentech. Xoma declined to comment, saying it wasn't familiar with the case.
-By Judith Burns, Dow Jones Newswires; 202-862-6692; Judith.Burns@dowjones.com |
