Using inside information, institutional investors were able to save tens of millions of dollars by selling stock before the public found out how badly profits were deteriorating at Schering-Plough, the Securities and Exchange Commission said yesterday.
The commission brought administrative proceedings against the drug company and its former chief executive, Richard J. Kogan. It issued cease-and-desist orders barring future violations of Regulation FD, for fair disclosure. But it took no action against the institutions that profited from the inside information.
Schering-Plough agreed to pay a $1 million penalty, the largest imposed for a violation of the fair disclosure regulation. Mr. Kogan, who has retired from the company, agreed to pay $50,000. He is the first individual to be penalized for violating Regulation FD, which was adopted more than two years ago. Neither admitted nor denied the accusations.
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