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| William Galvin |
Mirroring the sprawling probe of expert-network firm Primary Global Research, in which eight people have already been charged, another case involving an expert firm, Guidepoint Global Consultants, has led to new charges.
William Galvin, the Massachusetts Secretary of the Commonwealth, has filed a lawsuit against James Silverman of Risk Reward Capital Management (RRCM) alleging insider trading based on tips from Guidepoint Global. So far, Guidepoint has escaped accusations of wrongdoing and the identities of the tipsters have not been divulged.
Silverman is accused of profiting from tips that he used for his $24 million RRCM Bio Fund. The fund had been a big loser in 2008, but had phenomenal gains of over 50% in each of the last two years. The insider tips involved drug trial information from Ariad Pharmaceuticals and Questor Pharmaceuticals, located in Massachusetts and California, respectively.
"With access to Guidepoint, the fund began a dramatic resurgence," the lawsuit charges. "These returns were generated, at least in part, upon Silverman's receipt of material non-public information he received through Guidepoint consultants. Silverman apparently also knew that he should not have received this information, as he deleted his notes containing the study results prior to producing them to the [Securities] Division in response to its subpoena."
Guidepoint says it is fully cooperating with the probe. Smart boys!
