Galleon Says It Was ‘Victim’ of Skowron Crimes As He Faces Judge
Skowron admitted that he got a tip from a former adviser for HGSI that trials of a hepatitis C drug were being ended, which prosecutors say allowed FrontPoint to sell its stock in the company before the information became public and avoid $30 million in losses.
(Bloomberg News) Galleon Group LLC, the defunct hedge fund at the center of the biggest insider trading scheme in U.S. history, is seeking restitution as a victim of the crimes committed by Joseph F. "Chip" Skowron, the ex-FrontPoint Partners LLC fund manager to be sentenced today.
Galleon says it lost more than $1.5 million and Deutsche Bank AG, Germany's biggest lender, claims losses of $2.4 million as a direct result of Skowron's inside trades on Human Genome Sciences Inc. in January 2008. Skowron, 42, a Yale University- educated physician from Greenwich, Connecticut, pleaded guilty in August to conspiring to commit securities fraud and obstruction of a federal investigation. He is scheduled to be sentenced by U.S. District Judge Denise Cote in Manhattan.
"The funds and/or accounts that Galleon managed may be entitled to restitution in connection with losses they sustained in their trading of HGSI," George Lau, the former Galleon chief financial officer, said in a Nov. 2 letter to Manhattan U.S. Attorney Preet Bharara.
Skowron admitted that he got a tip from a former adviser for HGSI that trials of a hepatitis C drug were being ended, which prosecutors say allowed FrontPoint to sell its stock in the company before the information became public and avoid $30 million in losses.
Galleon and Deutsche Bank said they bought blocks of HGSI stock the day before the Rockville, Maryland-based drugmaker's shares plunged 44 percent on its announcement that trials of its Albuferon treatment were being halted because of safety concerns.
Raj Rajaratnam
Bharara's office in May won the conviction of Galleon co- founder Raj Rajaratnam on 14 insider-trading charges and he was sentenced last month to 11 years in prison. A nationwide crackdown on insider trading at hedge funds by Bharara and the Federal Bureau of Investigation in New York has resulted in more than 20 people being charged since November.
While U.S. probation officials estimated that Skowron could face 87 to 108 months in prison based on sentencing guidelines, prosecutors have agreed to a five-year term.
A pre-sentencing report issued by probation officials said Skowron doesn't dispute that Galleon and Deutsche Bank are victims of his crimes. The report said Skowron is seeking Cote's permission for an 18-month extension on when he must begin paying restitution.
Skowron's lawyer, James Benjamin III, declined to comment on the government's sentencing memorandum, which includes the victim restitution requests.
Morgan Stanley
Morgan Stanley, which acquired FrontPoint in 2006 and spun it off in February, submitted the largest restitution request, saying it should be paid $37.4 million after sustaining "very substantial damages" as a result of Skowron's criminal conduct. This includes at least $32 million New York-based Morgan Stanley paid to Skowron in compensation during a four-year period it said he was committing his crimes.
The sixth-biggest U.S. bank reached a settlement with the SEC for more than $33 million, was required to indemnify FrontPoint for the accord and has spent more than $4.4 million in legal fees related to Skowron's conduct, Arthur Lev, the bank's managing director said in an Oct. 21 letter to prosecutors.
Morgan Stanley said it had to take a $116 million write- down of its FrontPoint investment after Skowron's conduct became public, Lev said. The criminal case led to the closure of the bank's $1.5 billion health-care funds, resulting in the loss of 15 jobs, he said.
Skowron's illegal tips came from Yves Benhamou, an expert in hepatitis drugs who acted as a paid consultant to hedge funds while also advising HGSI and serving on its steering committee for trials of Albuferon, the U.S. said. Prosecutors said Skowron gave Benhamou more than $14,600 in cash and paid for hotel rooms and expenses.
Guilty Plea
Benhamou, who pleaded guilty in April, is scheduled to be sentenced in December.
Skowron admitted in his guilty plea that he lied to the U.S. Securities and Exchange Commission during a probe of suspicious trading in 2008. Prosecutors said he also "encouraged" Benhamou to conceal their crimes.
As a result of tips from Benhamou, FrontPoint sold about 2.9 million, or about 47 percent, of its HGSI shares in December 2007 and sold 600,000 shares on Jan. 22, 2008, the day before the company issued its news release about the drug trials and the stock price plummeted.
Lau, who is now chief operating officer of Spottail Capital Advisors LLC, said in his victim letter to prosecutors that Galleon HealthCare Fund and a second fund, called Permal, bought 500,000 shares of HGSI on Jan. 22, 2008, and lost about $1.56 million after the disclosure that the drug trials were halted.
$5 Million Forfeiture
A unit of Deutsche Bank bought a "large block" of HGSI shares from FrontPoint on Jan. 22, 2008, and then suffered $2.4 million in losses, according to the bank's letter to prosecutors.
Skowron already has consented to forfeit $5 million to the U.S. His additional commitment to a $2.7 million SEC penalty will have "devastating and financial consequences" for him, Benjamin said in court papers.
Assistant U.S. attorneys Pablo Quinones and Reed Brodsky, who prosecuted the case, disputed Skowron's claims of financial hardship.
The U.S. said Skowron earned more than $32 million while at FrontPoint, which had $7.5 billion under management at the start of November 2010, before he was criminally charged.
The prosecutors said in court papers that Skowron's estimated net worth will be about $20 million, even after he pays a $5 million forfeiture. The U.S. said that court officials estimate his home is worth about $7 million and that he also owns expensive cars including a 2006 Aston Martin Vanquish and 2009 Alfa Romeo 8C Spider.
The case is U.S. v. Skowron, 11-cr-699, U.S. District Court, Southern District of New York (Manhattan).
Hep C patient feared Farazli endoscopy unsanitary
Claims treatment by Ottawa doctor named in lawsuit painful
One of at least five former patients of Dr. Christiane Farazli who later contracted either hepatitis B or hepatitis C has told CBC News about the pain he endured during an endoscopy procedure he believes wasn't sanitary.
Robert Chenier is among the 1,200 people currently involved in a $10-million class-action lawsuit against Farazli, over an infection scare in which thousands of patients were told they might have been exposed to hepatitis B, hepatitis C and HIV during treatment.
"I know that thing, they didn't clean it before they put it in me," Chenier recounted Thursday.
The former patient cringes when he recalls the details. He claims that not only was his endoscopy session with Farazli unsanitary — it also hurt.
"I was yelling and yelling," he said, adding that staff ordered him to let them carry on with their work.
"My brother was in the waiting room. He heard me yell in pain."
Chenier, who already suffers from a number of health problems, including chronic pain and anxiety, now has to deal with the results of his blood test.
Difficult to prove link
While lawyers had previously announced that four people were infected with hepatitis C after receiving the notification to have themselves tested, on Thursday, they claimed that number climbed to at least five cases. It is not yet clear whether the latest patient has hepatitis B or C.
"She told me I did not have HIV, but tested positive for hepatitis C," Chenier said.
Still, proving he was infected due to a procedure he underwent at Farazli's clinic will be difficult.The door name and number for Dr. Christiane Farazli's clinic in the Parkdale Medical Tower is shown in Ottawa. (Sean Kilpatrick/CBC)
The probability that he contracted the infection from improperly sterilized equipment is roughly 1 in 50 million, according to Ottawa public health.
Those are nearly "impossible" odds, said Dr. Mark Tyndall, with Ottawa Hospital, noting that an estimated one per cent of people have antibodies to hepatitis C.
Statistically, among the 6,800 former patients of Dr. Farazli, an estimated 68 could test positive for hepatitis C.
"Pinpointing where the patients acquired their infection is the real challenge," said Tyndall.
Chenier, for instance, was an intravenous drug user for years — a top risk factor for hepatitis C. Still, he insists he's been clean for 15 years, showing a clean bill of health from 2007 that, he says, proves he didn't have hepatitis C before he began seeing Farazli.
The class-action suit against Farazli claims the specialist "failed to consistently follow standard and statutory practices and procedures used to clean endoscopes, and that her patients have suffered worry, anxiety and possible bodily injuries as a result."
Lawyer Nicholas Robinson of Merchant Law Group LLP, who is representing the former patients, was careful to say they will need expertise to figure out how to make the link.
"We have to show it is possible that these people could have contracted the illness," Robinson said. "It's our position that it's something that's likely already been admitted by the defendants - that it is possible that [the patients] could have contracted the illness."
There are still people waiting to hear the results of their blood tests, so it's possible more testimonials from patients will be emerging in the coming days.
Sydney GP fined over Hep C infections
Margaret Scheikowski
November 17, 2011 AAP
An eastern Sydney GP has been fined $25,000 after three patients contracted hepatitis C at his clinic.
As well as imposing a fine $2,500 less than the maximum penalty available, the NSW Medical Tribunal reprimanded Dr Daniel Hameiri "in the strongest terms".
It refused to continue a suppression order on his name, but emphasised that the Double Bay doctor has had "rigorous infection controls" in place for the past four years.
Dr Hameiri's practice provided intravenous and intramuscular vitamin therapies.
One patient was diagnosed with hepatitis C in March 2005, another in January 2007 and a third in February 2007.
According to agreed facts, they acquired the virus "via the spread of infected blood during intravenous procedures" performed at Dr Hameiri's practice.
The GP admitted unsatisfactory professional conduct between November 2004 and March 2007, including his failure to have written infection control policies in place.
He had ineffective standards for the safe use, handling and disposal of sharps; in managing blood or body substance spills; and in the training of staff in minimising cross-infection.
Dr Hameiri also admitted professional misconduct in relation to the use of multi-doses of vitamin C (marked `single use'), vitamin B and magnesium sulphate.
In its decision on Friday, the tribunal noted there also was a breach of ethics by Dr Hameiri and he failed to keep proper records of treatment provided to the three patients.
"We are satisfied existing infection control standards in the practitioner's surgery were not effective and fell significantly below that expected of a practitioner of the equivalent level of training and experience," it said.
"Those practices invited a strong level of criticism on peer review."
It was not a matter "where the impugned conduct has led to the exposure of a risk, but rather the risk of infection existed and that risk became a reality".
As well as the fine and reprimand, the GP is to be subjected to an audit of his medical records within six months.
He was ordered to pay the legal costs of the Health Care Complaints Commission.
Association for the Study of Liver Diseases San Francisco 2011 Nov 6-9
From NATAP
AASLD: Projections Using Decision-Analytic Modeling of Long-Term Clinical Value of Telaprevir for the Treatment of HCV Patients Who Had Failed Prior Peginterferon/Ribavirin Treatment -
AASLD: Evaluation of Drug Interaction Potential of the HCV Protease Inhibitor Asunaprevir (ASV; BMS-650032) at 200 mg Twice Daily (BID) in Metabolic Cocktail and P-glycoprotein (P-gp) Probe Studies in Healthy Volunteers
AASLD: Single-Dose Pharmacokinetics of Daclatasvir (DCV; BMS-790052) in Subjects With Hepatic Impairment Compared With Healthy Subjects
AASLD: Daclatasvir (DCV; BMS-790052) Has No Clinically Significant Effect on the Pharmacokinetics of a Combined Oral Contraceptive Containing Ethinyl Estradiol and Norgestimate in Healthy Female Subjects
AASLD: Prevalence of HCV Viral and Host IL28B Genotypes in China
More Hep C Articles...
From Medscape
AASLD Rural Vets Unlikely to Receive Specialist HCV Care
A much larger proportion of veterans infected with hepatitis C virus (HCV) are living in rural areas than previously identified; telemedicine for specialist care is being targeted to rural areas.
Medscape Medical News, November 16, 2011
November 16, 2011 (San Francisco, California) — An analysis performed by the Veterans Health Administration (VHA) suggests that not only are a surprising number of veterans infected with hepatitis C virus (HCV) living in rural areas, but less than half of these individuals have ever been seen by an HCV specialty provider. This finding was presented here at The Liver Meeting 2011: American Association for the Study of Liver Diseases 62nd Annual Meeting.
"What makes the VHA so unique in examining rural differences and access to care is the way in which the VHA is set up," said Catherine Rongey, MD, MSHS, assistant professor, gastroenterology and hepatology, San Francisco Veterans Affairs Medical Center and the University of San Francisco, California.
The VHA is the largest integrated healthcare system in the country. For specialist care, it is required that veterans be treated at one of the urban-based VHA centers where specialists reside. Any specialist care involves an electronic record, and because the VHA has embraced electronic health records, detailed records are easily obtained.
The first aim of this study was to determine the geographic distribution of HCV-infected patients; the second was to determine how a rural setting affects access to specialty HCV care. Data on viremic-confirmed patients, collected from 2005 to 2009, were obtained from the HCV Clinical Case Registry, a national VHA registry (n = 185,978). These data were analyzed for the distribution of HCV patients in rural and urban sites, the severity of liver disease, medical comorbidities, and HCV quality-of-care indicators.
Overall, the data showed that 40% of all VA patients reside in rural areas. What is interesting, Dr. Rongey said, "is that 32% of our veterans in rural areas are infected with hepatitis C. This is quite different than HIV or any other infectious disease. It's much higher than anticipated."
Perhaps as expected, these rural patients are receiving less specialist care than those in urban settings. This analysis shows that only 45% of rural veterans with HCV had ever seen an HCV specialist, compared with 50% of urban veterans. In addition, only 82.6% of rural veterans have ever undergone an HCV screening, compared with 85.2% of urban veterans.
In the multivariate analysis, after adjustment for cirrhosis and comorbidities, rural patients were 33% less likely to access hepatology care than urban patients (P ≤ .05). "Less than half of VHA patients with liver disease have accessed a gastroenterologist/liver physician," said Dr. Rongey, "and only 20% have been treated. Our response rates [to treatment] are lower than other healthcare systems, and our patients have more comorbidities."
Getting rural patients to the specialist is not the answer to improving care, she explained. In California, veterans can travel up to 8 hours round trip to seek specialty care. "Many of our patients also have PTSD or are anxiety disordered, so traveling 8 hours in a shuttle bus that goes through tunnels and over bridges may not be the best approach." The solution is to bring the specialist to the patient.
"One such initiative is focusing on leveraging telemedicine — doing provider-based telemedicine care as part of Project ECHO [Extension for Community Healthcare Outcomes], in which providers such as myself in San Francisco connect with multiple providers simultaneously at these outlying clinics." The idea is to transfer specialists' skills to the providers in a way that can actually benefit the patients.
"Our program is being designed to build specialty-level knowledge among primary care providers, and often to mid-levels," said Dr. Rongey. Her interest is not tutoring just on standards of care, but on recent changes in treatment paradigms. "While we're excited by all these new HCV treatments that are coming out, what could also be useful is training our primary care providers and mid-levels in the management of chronic liver disease."
Now that effective drugs are available, veterans who have failed treatment or who have been waiting for the new agents to be approved will be coming back and seeking specialist care.
Because this analysis showed that veterans living an any setting are being undertreated for HCV, the ECHO initiative will also provide opportunities to urban-based healthcare providers.
Project ECHO
"For the VA, all the incentives are perfectly aligned to do a project like ECHO," said founder and current director of Project ECHO, Sanjeev Arora, MD, professor of medicine, executive vice chair of the Department of Internal Medicine, University of New Mexico Health Sciences Center, Albuquerque.
In brief, ECHO is a telemedicine case-based approach that connects the urban-based specialist to the remotely located provider using the Internet. The program costs nothing to the remote participant, and Internet access is funded by the program. ECHO participants who complete educational modules related to specialty care for the HCV patient can earn CME credits.
Dr. Arora pointed out that the VHA has long waits for specialty consultation across its entire system, and that lack of access is actually driving up costs. "For example, in 2009, the VA paid $8 million in travel expenses to transport vets for specialty care from outlying areas to the VA center in Albuquerque. These are massive costs that are not likely adding to the patient's care experience," and are possibly causing discomfort.
The VHA hopes expand access to specialty care by using the blueprints from Project ECHO.
"The VA is a very thoughtful and large organization, and it involves a significant amount of dialog," Dr. Arora said with a smile when reporting on the progress made with so far Project ECHO. "They've been extraordinarily responsive to the need, and they are rolling out ECHO at an absolutely rapid speed all across the VA system."
Dr. Rongey and Dr. Arora have disclosed no relevant financial relationships.
The Liver Meeting 2011: American Association for the Study of Liver Diseases (AASLD) 62nd Annual Meeting: Abstract 102. Presented November 6, 2011.
Pharmaceuticals
Cambodian Wholesalers: What’s A Counterfeit Med?
Putting a stop to counterfeit meds is a full-time job, but to what extent do wholesalers understand the problem? Like anything else, that depends on who you ask. But since Asia is seen as a weak link in the global supply chain, a group of researchers surveyed wholesalers in Cambodia to assess their practices and the findings are sobering.
For starters, nearly 13 percent of the wholesalers said they had encountered counterfeit meds, but their perceptions varied considerably. A majority, or nearly 60 percent, defined counterfeits as drugs without registration, but other definitions included meds that were fraudulently manufactured, those without a batch or lot number, meds containing harmful ingredients or a reduced amount of active ingredients, and expired medicines. Meanwhile, 8 percent had no idea what counterfeits were...Continue Reading @Pharmalot
AASLD: Evaluation of Drug Interaction Potential of the HCV Protease Inhibitor Asunaprevir (ASV; BMS-650032) at 200 mg Twice Daily (BID) in Metabolic Cocktail and P-glycoprotein (P-gp) Probe Studies in Healthy Volunteers
AASLD: Single-Dose Pharmacokinetics of Daclatasvir (DCV; BMS-790052) in Subjects With Hepatic Impairment Compared With Healthy Subjects
AASLD: Daclatasvir (DCV; BMS-790052) Has No Clinically Significant Effect on the Pharmacokinetics of a Combined Oral Contraceptive Containing Ethinyl Estradiol and Norgestimate in Healthy Female Subjects
AASLD: Prevalence of HCV Viral and Host IL28B Genotypes in China
More Hep C Articles...
From Medscape
AASLD Rural Vets Unlikely to Receive Specialist HCV Care
A much larger proportion of veterans infected with hepatitis C virus (HCV) are living in rural areas than previously identified; telemedicine for specialist care is being targeted to rural areas.
Medscape Medical News, November 16, 2011
November 16, 2011 (San Francisco, California) — An analysis performed by the Veterans Health Administration (VHA) suggests that not only are a surprising number of veterans infected with hepatitis C virus (HCV) living in rural areas, but less than half of these individuals have ever been seen by an HCV specialty provider. This finding was presented here at The Liver Meeting 2011: American Association for the Study of Liver Diseases 62nd Annual Meeting.
"What makes the VHA so unique in examining rural differences and access to care is the way in which the VHA is set up," said Catherine Rongey, MD, MSHS, assistant professor, gastroenterology and hepatology, San Francisco Veterans Affairs Medical Center and the University of San Francisco, California.
The VHA is the largest integrated healthcare system in the country. For specialist care, it is required that veterans be treated at one of the urban-based VHA centers where specialists reside. Any specialist care involves an electronic record, and because the VHA has embraced electronic health records, detailed records are easily obtained.
The first aim of this study was to determine the geographic distribution of HCV-infected patients; the second was to determine how a rural setting affects access to specialty HCV care. Data on viremic-confirmed patients, collected from 2005 to 2009, were obtained from the HCV Clinical Case Registry, a national VHA registry (n = 185,978). These data were analyzed for the distribution of HCV patients in rural and urban sites, the severity of liver disease, medical comorbidities, and HCV quality-of-care indicators.
Overall, the data showed that 40% of all VA patients reside in rural areas. What is interesting, Dr. Rongey said, "is that 32% of our veterans in rural areas are infected with hepatitis C. This is quite different than HIV or any other infectious disease. It's much higher than anticipated."
Perhaps as expected, these rural patients are receiving less specialist care than those in urban settings. This analysis shows that only 45% of rural veterans with HCV had ever seen an HCV specialist, compared with 50% of urban veterans. In addition, only 82.6% of rural veterans have ever undergone an HCV screening, compared with 85.2% of urban veterans.
In the multivariate analysis, after adjustment for cirrhosis and comorbidities, rural patients were 33% less likely to access hepatology care than urban patients (P ≤ .05). "Less than half of VHA patients with liver disease have accessed a gastroenterologist/liver physician," said Dr. Rongey, "and only 20% have been treated. Our response rates [to treatment] are lower than other healthcare systems, and our patients have more comorbidities."
Getting rural patients to the specialist is not the answer to improving care, she explained. In California, veterans can travel up to 8 hours round trip to seek specialty care. "Many of our patients also have PTSD or are anxiety disordered, so traveling 8 hours in a shuttle bus that goes through tunnels and over bridges may not be the best approach." The solution is to bring the specialist to the patient.
"One such initiative is focusing on leveraging telemedicine — doing provider-based telemedicine care as part of Project ECHO [Extension for Community Healthcare Outcomes], in which providers such as myself in San Francisco connect with multiple providers simultaneously at these outlying clinics." The idea is to transfer specialists' skills to the providers in a way that can actually benefit the patients.
"Our program is being designed to build specialty-level knowledge among primary care providers, and often to mid-levels," said Dr. Rongey. Her interest is not tutoring just on standards of care, but on recent changes in treatment paradigms. "While we're excited by all these new HCV treatments that are coming out, what could also be useful is training our primary care providers and mid-levels in the management of chronic liver disease."
Now that effective drugs are available, veterans who have failed treatment or who have been waiting for the new agents to be approved will be coming back and seeking specialist care.
Because this analysis showed that veterans living an any setting are being undertreated for HCV, the ECHO initiative will also provide opportunities to urban-based healthcare providers.
Project ECHO
"For the VA, all the incentives are perfectly aligned to do a project like ECHO," said founder and current director of Project ECHO, Sanjeev Arora, MD, professor of medicine, executive vice chair of the Department of Internal Medicine, University of New Mexico Health Sciences Center, Albuquerque.
In brief, ECHO is a telemedicine case-based approach that connects the urban-based specialist to the remotely located provider using the Internet. The program costs nothing to the remote participant, and Internet access is funded by the program. ECHO participants who complete educational modules related to specialty care for the HCV patient can earn CME credits.
Dr. Arora pointed out that the VHA has long waits for specialty consultation across its entire system, and that lack of access is actually driving up costs. "For example, in 2009, the VA paid $8 million in travel expenses to transport vets for specialty care from outlying areas to the VA center in Albuquerque. These are massive costs that are not likely adding to the patient's care experience," and are possibly causing discomfort.
The VHA hopes expand access to specialty care by using the blueprints from Project ECHO.
"The VA is a very thoughtful and large organization, and it involves a significant amount of dialog," Dr. Arora said with a smile when reporting on the progress made with so far Project ECHO. "They've been extraordinarily responsive to the need, and they are rolling out ECHO at an absolutely rapid speed all across the VA system."
Dr. Rongey and Dr. Arora have disclosed no relevant financial relationships.
The Liver Meeting 2011: American Association for the Study of Liver Diseases (AASLD) 62nd Annual Meeting: Abstract 102. Presented November 6, 2011.
Pharmaceuticals
Cambodian Wholesalers: What’s A Counterfeit Med?
Putting a stop to counterfeit meds is a full-time job, but to what extent do wholesalers understand the problem? Like anything else, that depends on who you ask. But since Asia is seen as a weak link in the global supply chain, a group of researchers surveyed wholesalers in Cambodia to assess their practices and the findings are sobering.
For starters, nearly 13 percent of the wholesalers said they had encountered counterfeit meds, but their perceptions varied considerably. A majority, or nearly 60 percent, defined counterfeits as drugs without registration, but other definitions included meds that were fraudulently manufactured, those without a batch or lot number, meds containing harmful ingredients or a reduced amount of active ingredients, and expired medicines. Meanwhile, 8 percent had no idea what counterfeits were...Continue Reading @Pharmalot
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