Ex Biogen exec fined $3 million dollars to settle insider trading charges

http://www1.cchwallstreet.com/ws-por...sp?fn=01-17-06

Ex-Biogen Exec Fined $3M in Insider Trading Case By Jennifer McCandless
January 17, 2006

Thomas Bucknum, former general counsel for Biogen Idec, will pay $3 million to settle insider trading charges filed by the Securities and Exchange Commission.

According to the SEC, Bucknum sold thousands of company shares in the two weeks before the company’s multiple sclerosis drug, Tysabri, was withdrawn from the market in February 2005 because of safety concerns.

In settling with the SEC, Bucknum agreed to disgorge $1.9 million in stock gains from the trade, as well as a civil penalty of $969,000 and interest of $102,000. Bucknum is also barred from serving as an officer or director of a publicly traded company for five years.

Bucknum sold 89,700 shares before information became public that two patients taking its multiple sclerosis drug Tysabri had developed a rare brain disease. Once the information was released and the drug was pulled from the market, Biogen’s stock plunged 42%, according to the complaint released by the SEC.

On the morning of Feb. 18, 2005, Bucknum told his broker he wanted to exercise 89,700 stock options and sell the shares. At about noon, Bucknum attended a meeting in which he and other senior Biogen officers learned that a patient taking Tysabri had been diagnosed with a rare and fatal brain disease and that another patient may have contracted the illness.

Following the meeting, Bucknum called his broker's associate, who told him he had received legal clearance from Biogen for the stock sale, and Mr. Bucknum told the associate to sell the shares. Shortly after 2 p.m., the 87,900 shares were sold for an average price of $67.12 and a profit of $1.9 million.

On February 28, Biogen and Elan Corp., the company’s partner in marketing the drug, suspended Tysabri sales and Biogen’s stock price dropped to $38.65 from $67.28 the day before.

Bucknum resigned as general counsel of the Cambridge-based drug maker last March. In settling with the SEC, Bucknum neither admitted nor denied any wrongdoing.