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Reuters
NASD suspends analyst brothers over violations
Monday October 28, 2:54 pm ET
WASHINGTON, Oct 28 (Reuters) - NASD said on Monday it had fined and suspended two brothers employed by Sterling Financial Investment Group as analysts over how they gathered clinical trial information.
David Risk, a research analyst, and his brother, Doug Risk,
violated NASD rules in gathering and using confidential information related to clinical trials for a sleep medication made by Neurocrine Biosciences Inc. (NasdaqNM:NBIX - News), NASD, a regulator of the financial services industry, said in a statement.
Neurocrine was not involved in the misconduct, NASD said.
David Risk was suspended for eight months and fined $35,000, while Doug Risk was suspended for five months and fined $5,000.
Sterling Financial was fined $40,000 and was ordered to retain an outside consultant to review the firm's policies and procedures concerning its research department. Steven Kirsch, the head of research at Sterling, was fined $10,000 and suspended as a principal and supervisor for 30 days.
NASD, formerly the National Association of Securities Dealers, said David Risk had scheduled an appointment to participate in a clinical trial on an insomnia drug in February 2002. David Risk directed his brother to go to the clinic and portray himself as David.
Doug Risk had signed his brother's name on a confidentiality agreement about the treatment information.
Despite the existence of the confidentiality agreement, Doug Risk told his brother what he learned at the clinic. David Risk did nothing to verify the accuracy of the information and included it in a research report he co-wrote about Neurocrine, which was issued to customers and potential customers of Sterling on Feb. 20, 2002.
The report contained other material written by David Risk that was inaccurate or misleading. David and Doug Risk were also charged with violating NASD rules by failing to advise Sterling, in writing, of accounts they had at other firms.
Doug Risk made trades in one of those accounts, including trades in stocks Sterling was following, without notifying Sterling of the trades.
Sterling and Kirsch were sanctioned for failure to supervise the activities of the firm's research department and research analysts.
In settling this case, the respondents neither admitted nor denied the findings made by NASD.
Sterling Financial was not immediately available for comment.
Peter |
