Man on trial for insider trading after passing government info

| Apr 20, 2018 | White Collar Crimes |

People in South Carolina might be interested in a trial that is currently pending in New York. The case involves a former federal employee who worked for the Centers for Medicare and Medicaid Services before leaving to work at firms through which he was a consultant for hedge funds.

The man allegedly passed information that he learned from a friend who was still working for the government to a New York hedge fund called Deerfield Management. The information involved the government’s plans to increase the reimbursement rates for kidney dialysis while lowering them for certain forms of cancer treatments. The hedge fund paid $832,000 to the consulting firm where the man worked and leveraged the information that it had received to make $3.5 million in trading profits.

Two of the hedge fund’s partners, the man’s friend in the government and the man are all on trial. Another partner of Deerfield Management pleaded guilty to the offense previously. In an effort to receive a more lenient sentence, he is reportedly cooperating with the prosecutor’s office. In a settlement with the Securities and Exchange Commission, Deerfield Management admitted that it did not properly supervise its employees and paid a fine of $4.6 million.

People who learn that they are the targets of federal investigations may want to secure counsel before they are indicted. Experienced criminal defense lawyers who practice in federal court are sometimes able to negotiate agreements with the U.S. Attorney’s Office for their clients to pay civil fines instead of facing indictment. For people who have already been indicted, attorneys may carefully analyze the evidence in the case in an effort to identify problems. They may then use the information to try to negotiate pleas to lesser offenses or agreements for sentencing departures.