RIVERSIDE, Calif. (CN) - Two medical investigators avoided losses of $45,600 by trading on inside information about the failure of a biopharmaceutical company's drug for prostate cancer, the SEC claims in court.
The SEC sued Drs. Franklin M. Chu and Daniel J. Lama, in separate complaints in Federal Court.
Chu, of San Bernardino Urological Associates, was a lead medical investigator in clinical trial of Capesaris, a drug developed by (nonparty) GTx Inc.
The SEC says Chu, 62, of Riverside, dumped 16,000 shares of GTx stock upon learning that the clinical trials were being stopped because of an increased risk of blood clots. GTx shares dropped by 36 percent in a day when the news came out. Chu avoided $34,081 in losses by trading on the inside information, the SEC says.
Lama, 55, of Highland, also with San Bernardino Urological Associates, was a medical investigator in the same trial. He dumped 5,400 shares of GTx based on the inside information, the SEC says, avoiding losses of $11,502.
The SEC seeks disgorgement of ill-gotten gains, with interest, and an injunction, in both cases.
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