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Four plead not guilty to insider trading involving U.S. health agency
May 31, 2017 / 5:54 PM / 6 months ago

Four plead not guilty to insider trading involving U.S. health agency

NEW YORK, May 31 (Reuters) - A Washington, D.C. political consultant and three others pleaded not guilty on Wednesday to charges that they engaged in an insider trading scheme based on leaks from within a federal healthcare agency.

Political consultant David Blaszczak, founder of Precipio Health Strategies; Christopher Worrall, most recently an employee of the U.S. Centers for Medicare and Medicaid Services (CMS); and Rob Olan and Ted Huber, most recently partners at healthcare hedge fund Deerfield Management entered their pleas before U.S. District Judge Denise Cote in Manhattan.

Olan and Huber are no longer listed on Deerfield’s website, and Deerfield did not immediately respond to a request for comment. It also could not immediately be determined whether Worrall is still employed by CMS.

The four were arrested and charged by federal prosecutors last week. A former Deerfield member who was also charged, Jordan Fogel, pleaded guilty the previous Friday.

Prosecutors said that from 2012 to 2014, Olan, Huber and Fogel schemed to get confidential information about CMS’s internal decision-making from Blaszczak, who previously worked there. Blaszczak in turn got the information from his former colleague and “close friend” Worrall, prosecutors said.

CMS, part of the Department of Health and Human Services, oversees government health insurance programs. The confidential information included advance notice about rules cutting reimbursement rates for radiation cancer treatment and dialysis, allowing Deerfield to short healthcare companies affected by the cuts.

The companies included radiation oncology companies Accuray Inc and Varian Medical Systems, and dialysis companies DaVita Healthcare Partners Inc and Fresenius Medical Care, a unit of Fresenius Medical Care, AG of Germany, among others, according to the indictment.

According to a related complaint by the U.S. Securities and Exchange Commission, the scheme yielded $3.9 million in profits and at least $193,000 in consulting fees for Blaszczak’s companies. (Reporting By Brendan Pierson in New York; Editing by David Gregorio)

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