Ex-Biogen Idec executive settles insider trading case
BOSTON – A former executive at Biogen Idec Inc. who resigned last spring amid an insider trading investigation has reached a $3 million settlement with federal securities regulators.The settlement announced Thursday by the Securities and Exchange Commission requires Thomas J. Bucknum to give up $1.9 million in profit plus pay a penalty of $969,000 and $102,000 in interest. Bucknum also is barred from serving as a director or officer of a publicly traded company for five years.Bucknum resigned as Cambridge-based Biogen Idec’s legal counsel on March 9. The sudden move came amid a regulatory inquiry into his sale of 89,700 shares of Biogen Idec stock the same day the company says it learned of patient illnesses that led to the withdrawal of its multiple sclerosis drug Tysabri from the market.The 59-year-old Bucknum did not admit wrongdoing under the settlement, which is subject to approval from a U.S. District Court judge in Boston.In a statement issued through his attorney, he said, “I believe it was prudent to end this episode now and put it behind me.”The SEC complaint alleged Bucknum instructed his broker’s associate at 1:30 p.m. on Feb. 18 to proceed with a plan Bucknum had discussed with the broker that morning to sell the shares. The agency said the order to sell came just after Bucknum attended a noon meeting with other executives, at which they learned about the patient illnesses.The drug was withdrawn 10 days later, which sent the company’s shares plummeting 42 percent that day. Bucknum netted about $1.9 million from the sale.Bucknum’s attorney, Juan Marcelino, said his client initiated the trade that morning before the meeting.The SEC alleges Bucknum told his broker in the morning he wanted to excercise options to buy the Biogen stock and then sell those shares, and the broker understood from the conversation that Bucknum wanted to sell the shares at a price of $68 apiece or better.In the second conversation with the associate broker – after the meeting where the illnesses were discussed – Bucknum instructed the associate to proceed with the sale at the market price, which was then around $67 a share, the SEC said. The shares were sold shortly thereafter.After Bucknum’s resignation, Biogen Idec said he would not receive severance compensation. Bucknum started at Biogen in 1996 as chief corporate counsel, and was appointed general counsel in 1999.Last April, the company said in a regulatory filing that the SEC was formally investigating possible securities laws violations related to Tysabri’s withdrawal.Biogen Idec also has faced shareholder lawsuits alleging other company insiders profited through stock trades made before Biogen publicly disclosed safety concerns about Tysabri.The company has said the lawsuits are without merit and that some of the stock transactions were part of pre-planned trading programs scheduled months before Tysabri’s problems emerged.Biogen Idec spokesman Jose Juves said Thursday the company was cooperating with the SEC in its investigation and that it was “pleased” Bucknum had settled the complaint.Tysabri was removed from the market because of fears that it may heighten the risk of contracting a rare and often deadly disease of the central nervous system. The company has since applied to return the drug to the market with a revised warning label, and hopes to hear back from the Food and Drug Administration by the end of March.Shares of Biogen Idec fell 33 cents to $47.20 in afternoon trading on the Nasdaq Stock Market, where they have had a 52-week range of $33.18 to $70.Vail, Colorado
Support Local Journalism
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User