Biotech Values

[io_io]

follow-up to famous Seattle Times investigation:


Wednesday, May 3, 2006

Grassley continues scrutiny of alleged sales of drug-study secrets

WASHINGTON --- As part of his own ongoing review of allegations reported
last summer, Sen. Chuck Grassley has asked the Securities and Exchange Commission
for its view on a new analysis by the Congressional Research Service that Wall Street
firms may be violating federal securities laws when they buy or sell securities for their
clients based on secret information purchased from clinical researchers who are involved
in pharmaceutical drug studies.

Grassley is Chairman of the Senate Committee on Finance. Last August, he urged
the Securities and Exchange Commission to consider these allegations, which appeared in
the Seattle Times.

The text of Grassley’s latest letter follows here:

May 3, 2006
The Honorable Christopher Cox
Chairman
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Dear Chairman Cox:
On August 8, 2005, I referred to the Securities Exchange Commission (SEC) for
consideration serious allegations that clinical researchers were divulging confidential,
nonpublic drug research information to Wall Street firms, which, in turn, used that
information to purchase or sell securities for their clients. Companies known as
“matchmakers” pay these researchers to speak with investment firms regarding ongoing
clinical studies. When confidential, nonpublic information can be bought and sold, it
creates an uneven playing field for investors and hurts those who choose to play by the
rules. Furthermore, the integrity of the scientific process itself is compromised by clinical
researchers who disclose, wittingly or unwittingly, the details about ongoing research in
violation of confidentiality agreements with pharmaceutical companies. In response to
my letter, SEC staff provided a confidential briefing to my Committee on Finance
(Committee) staff regarding this matter on August 17, 2005. I thank you for facilitating
that briefing and write today seeking your continued cooperation.

In your written response dated August 31, 2005, you stated that the SEC is
investigating the allegations described in the August 7, 2005, Seattle Times article, as
well as “conducting an independent analysis of the relationships between clinical
physicians and Wall Street professionals in an effort to determine the scope of the


etc, etc (sorry don't have full text, but at least the issue is very much alive....)