You'll need to read all of this morning's longer Crain's New York Business piece (by Aaron Elstein) I've quoted briefly below, to get the full sense of this, but it concludes thus:
. . . .Merck, Schering-Plough
Closer to home, it appears insider trading took place in the days before a $47 billion merger was announced between two of the New York region’s pharmaceutical giants, Merck and Schering-Plough.
Last March 6, the Friday before the deal was announced, Schering-Plough shares rose 8%, and trading volume jumped to 34 million shares, more than double the average of the previous three weeks and the highest in nearly a year. Hordes of Wall Street advisers had a hand in this deal. No fewer than six law firms counseled acquirer Merck and its bankers at J.P. Morgan, while four law firms advised target Schering-Plough and its M&A crew at Morgan Stanley and Goldman.
Will the past few years’ spike in unusual trading activity lead to more Wall Streeters in jail? Time will tell. But it’s worth noting that on Oct. 20, when Mr. Ackman cheekily made his pitch for Corrections Corp. as a hedge against hedge fund prosecutions, the company’s shares rose 5%, hitting a new 52-week high. . . .
Now, to be clear -- and as I mentioned the first time this story came up, when the SEC first confirmed it was investigating the March 6, 2009 Schering-Plough pre-announcement trading, to The Wall Street Journal, on April 30, 2009 -- there is nothing to suggest that either company, itself, had a hand in leaking, down-stream tipping or the allegedly "inside" trading -- but it is clear that someone out there knew something was imminent. And 34 million shares changed hands at an artificially low price, that Friday.
No comments:
Post a Comment