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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (6947)	8/20/2002 4:09:38 PM
From: Icebrg	Read Replies (1) \| Respond to of 52153

NASD launches probe into research analyst By Per Jebsen NEW YORK, Aug. 20 (Reuters) - A securities industry regulator has launched a probe into whether a securities analyst for a Florida-based investment bank improperly disclosed information concerning the prospects of drug still in development, the bank and others said. The probe by the National Association of Securities Dealers, which is focused on an analyst at Sterling Financial Investment Group, was first reported in the Tuesday edition of the Wall Street Journal. On Aug. 8, the Journal reported the analyst had disclosed in a research report confidential information obtained when he signed up in February as a patient at the West Palm Beach-based Palm Beach Research Center. The NASD has become increasingly active in investigating the activities of Wall Street analysts, who among other things have been repeatedly criticized for hyping stocks. The NASD is probing the stock picks of Jack Grubman, the former star telecom analyst for Citigroup's (NYSE:C - News) Salomon Smith Barney unit. Earlier this year, the self-regulatory organization, which oversees the Nasdaq Stock Market, disciplined New York banking boutique Hornblower & Weeks Inc. for overly bullish stock reports. "There's a very narrow inquiry (by the NASD)," said Jeff Mustard, a spokesman for Sterling Financial. "We're opening ourselves up to them in any way they wish," he said. Sterling, which is based in Boca Raton, has suspended the analyst, David Risk, for three months and fined him $25,000 for violating internal rules in connection with the drug trial, Mustard said. The NASD declined to confirm or deny the existence of an inquiry. Risk, reached at home, declined to comment, referring questions to Sterling. NASD investigators from Washington, D.C. spent two days at the Palm Beach center asking questions about Risk's participation in a patient-screening process for an insomnia drug, according to David Scott, the center's vice president. The center conducts drug trials for pharmaceutical companies. Risk approached the center to gather information on the drug, which was developed by Neurocrine Biosciences Inc. (NasdaqNM:NBIX - News), rather than participate in the clinical trial, Scott said. According to the Journal, Risk published a negative research report on Neurocrine shortly after his Feb. 15 participation in the Palm Beach screening process. "He's getting information that is not available to the public, that is available only to a very select patient population," Scott said. Scott said Risk used the information incorrectly in his report. In a statement, Sterling said Risk is a diagnosed insomniac currently being prescribed a drug for treatment of a sleep disorder. Risk never enrolled in the Neurocrine trial but rather participated in a screening visit meant to be informational, Sterling said. Moreover, information obtained through Risk's visit to the Palm Beach center served only an "incremental purpose" in Sterling's research reports on Neurocrine, Sterling said. "Sterling does not call clinical trial managers under any false pretenses and we do not pose as medical doctors," Sterling said. The Palm Beach center said its business of running clinical trials for pharmaceutical companies has been hurt by the controversy. The center, which has about 25 employees including doctors, nurses, and medical assistants, is considering legal action against Sterling, the Center's Scott said.