A French doctor hired as an adviser on a clinical trial for a liver disease drug passed along secrets about the results, including information about a death, to a hedge fund portfolio manager who dodged $30 million in losses as a result, federal authorities said yesterday in announcing the doctor's arrest.
Yves Benhamou, 50, of Neuilly-sur-Seine, France, was arrested in Boston on Monday and charged with securities fraud and conspiracy to commit securities fraud, according to a news release from U.S. Attorney Preet Bharara and Janice Fedarcyk, head of the FBI's New York office. If convicted, he could face up to 25 years in prison.
A lawyer for Benhamou did not immediately return a telephone message for comment.
Benhamou, an expert in hepatitis treatment, worked for Human Genome Science Inc., a biopharmaceutical company, on a steering committee that oversaw the clinical trial of Albuferon, a drug being tested as a treatment for liver disease hepatitis C, authorities said.
They said he simultaneously accepted a stream of payments to consult with hedge funds and other investors who bought and sold securities in the health care sector.
Between November 2007 and January 2008, Benhamou communicated information about serious negative results in the trial, including facts about a fatality and the occurrence of lung disease in another patient, to the hedge fund manager, who was identified in court papers only as "CC-1," court papers said.
The death and lung disease were possible side effects of the dosage the trial participants were receiving.
The hedge fund manager then arranged to sell the fund's 6 million shares in Human Genome Science, allowing the fund to avoid losses of about $30 million, prosecutors said.