Business

F.D.A. Chemist Charged With Inside Trading in Drug Companie...

http://www.nytimes.com/2011/03/30/business/economy/30chemi...

Reprints

This copy is for your personal, noncommercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.com for samples and additional information. Order a reprint of this article now.

March 29, 2011

U.S. Chemist Is Charged With Insider Stock Trades

By DIANA B. HENRIQUES

A 15-year veteran of the federal Food and Drug Administration and his 25-year-old son were arrested on Tuesday and charged with systematically using confidential information about pending drug applications to reap millions in illegal trading profits since 2007. The charges were made in a criminal complaint filed by the Justice Department against Cheng Yi Liang, 57, and his son, Andrew Liang, both residents of Gaithersburg, Md. The Securities and Exchange Commission simultaneously filed a civil securities fraud complaint against the elder Mr. Liang. Timothy Sullivan, a lawyer for Andrew Liang, declined to comment on the charges. Andrew Carter, a federal public defender temporarily assigned to represent Cheng Yi Liang, did not respond to calls seeking comment. The cases, filed in Federal District Court in Greenbelt, Md., cited trades in the stock of five pharmaceutical companies whose products were undergoing review at the F.D.A.’s Office of New Drug Quality Assessment, where the elder Mr. Liang worked as a chemist. His job gave him access to a password-protected database that tracked the status of new drugs under review. The criminal complaint accused him of using that database to get an early look at F.D.A. decisions on companies developing drugs and then working with his son to trade on that knowledge, buying stock ahead of good news and selling it before bad news was announced. The complaints assert that the...