Insider Trading Scandal Rocks Healthcare Industry
Federal Prosecutors Crack Down on Illegal Trading
A Pennsylvania man, Carlos Sacanell, 58, has been charged with insider trading for using confidential information from his domestic partner to trade illegally ahead of CVS Health’s massive $9.5 billion acquisition of primary care provider Oak Street Health. The charges were filed on Thursday, and Sacanell was arrested at his home in Willow Grove.
A Lucrative Tip-Off
According to authorities, Sacanell’s partner, a senior executive at Oak Street Health, shared material non-public information about the planned takeover, which Sacanell used to generate a staggering $617,000 in profits from trading Oak Street stock and options. The trading began just two days after Sacanell’s partner expressed discomfort about having confidential information they couldn’t share.
A Web of Deceit
Sacanell allegedly instructed his partner to deny any knowledge of the takeover to inquiring coworkers, and later lied to the FBI about receiving the tips. The U.S. Securities and Exchange Commission has filed a related civil case against Sacanell, who has yet to respond to requests for comment.
A Major Acquisition
CVS Health, the drugstore chain and pharmacy benefits manager, agreed to buy Oak Street Health for $39 per share, a whopping 50% above the stock’s value shortly before the takeover news became public. Oak Street’s share price surged 36% over the next two days, including after the takeover announcement. The total value of the transaction, including debt, was pegged at $10.6 billion.
Justice Served
U.S. Attorney Jacqueline Romero’s office in Philadelphia has taken swift action against Sacanell, sending a strong message to those who would engage in illegal insider trading. As the investigation continues, one thing is clear: the consequences of such actions will be severe.
Leave a Reply