On April 14, 2011, James Fan stood on a parking garage landing at Newark Liberty International Airport, a cheer-you-up letter from his young son in his pants pocket, the prospect of a four-story leap facing him.
Fan, 39, had been charged a day earlier with insider- trading based on his knowledge of Seattle Genetics Inc. (SGEN), a health-care company where he was manager of clinical programming. Also charged: his younger brother, Zishen, who was scheduled to take the oath of U.S. citizenship a month later.
Bloomberg reports that the total take, a judge later determined, was about $200,000. James Fan was trying to help his brother, who had found himself deep under water after the California real estate market collapsed in 2008, prosecutors said later.
'The Fan case is such a cautionary tale', Jenny Durkan, the U.S. attorney in Seattle, said in an interview.
The markets are awash in insider trading, and the health- care industry has been particularly hard-hit. Health-care businesses offer illegal traders more opportunities to profit than the finance and technology sectors that have traditionally been prime victims of insiders who leaked confidential data about earnings or deals.
Health companies can live or die on the results of drug trials, which stretch for years before regulators make decisions that can trigger hundreds of millions of dollars in profits or losses. And the industry has undergone significant consolidation, leading to several multibillion-dollar mergers.
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