(Corrects 9th paragraph to say that Schultz Chan was accused of
tipping Songjiang Wang before the September 2015 announcement)
By Nate Raymond
Feb 7 A Merrimack Pharmaceuticals Inc
employee was arrested on Tuesday on charges that he engaged in
an insider trading scheme with a former employee of a rival
Songjiang Wang, who Cambridge, Massachusetts-based Merrimack
has employed as director of statistical programming since 2011,
was charged in a criminal complaint filed in federal court in
Boston with conspiring to commit securities fraud.
The 52-year-old was arrested after prosecutors brought
related charges in June against Schultz Chan, who had been the
director of biostatistics at another Cambridge-based company,
Akebia Therapeutics Inc.
Wang, of Westford, Massachusetts, was released on a $750,000
bond after a court hearing on Tuesday, a spokeswoman for Acting
U.S. Attorney William Weinreb in Boston said.
Wang's lawyer did not respond to a request for comment. A
lawyer for Chan, who has pleaded not guilty, declined to
Merrimack said in a statement that the case was an "isolated
matter involving a single, non-executive level employee" and the
company was cooperating with authorities.
"Merrimack takes seriously compliance and is committed to
the highest standards of ethical conduct as we work to develop
treatments for cancer patients around the world," the statement
According to the complaint, Wang provided Chan inside
information in 2013 and 2014, ahead of announcements by
Merrimack about positive results in three different drug
studies. This allowed Chan to place trades based on those tips.
Chan, in turn, tipped Wang in advance of positive clinical
study results for a new drug being developed by Akebia, which
allowed him to place trades ahead of the company's announcement
in September 2015, the complaint said.
Based on that tip, Wang made $105,000 in illegal trading
profits, according to an earlier lawsuit against Chan by the
U.S. Securities and Exchange Commission.
That lawsuit referred to Wang, without using his name, as
friend of Chan's who had previously loaned him $80,000.
The case is U.S. v. Wang, U.S. District Court, District of
Massachusetts, No. 17-mj-1005.
(Reporting by Nate Raymond in New York; Editing by Lisa Von
Ahn, Grant McCool and Dan Grebler)