02 June 2017

US corporate law news weekly: SEC files charges in trading scheme involving confidential government information

On May 24, 2017 the SEC announced charges in an alleged insider trading scheme involving tips of nonpublic information about government plans to cut Medicare reimbursement rates, which affected the stock prices of certain publicly traded medical providers or suppliers. The SEC’s complaint alleges that a former government employee obtained key confidential details about upcoming decisions by the Centers for Medicare and Medicaid Services (CMS) from his close friend and former colleague at the agency.

According to the SEC’s complaint, the tipper serves as a health insurance specialist in the CMS and tipped the recipient about at least three pending CMS decisions that affected the amount of money that companies receive from Medicare to provide services or products related to cancer treatments or kidney dialysis.

For more information, see https://www.sec.gov/news/press-release/2017-109.

Category: Blog