The SAC Capital Advisors insider-trading scandal has inspired an episode of the fictional television program “Person of Interest.” The show features a plotline that was probably taken from recent media headlines about SAC Capital, but we might humbly suggest that the show instead feature a plotline that DeepCapture published more than three years ago.
The CBS crime drama told the tale of insider-trading at a hedge fund called “VAC Capital,” a clear reference to SAC Capital, and just as the real SAC trader Mathew Martoma has been accused of earning for SAC Capital a massive sum ($276 million) from trading on tips about Alzheimer’s drug trials that he received from a University of Michigan professor, so too does the VAC trader turn a massive profit (inflated to $500 million for the purposes of television titillation) from an inside tip. However, readers of DeepCapture might recall that the full (true) story is a lot worse than just that.
In 2009, DeepCapture published a book-length story (“Michael Milken, 60,000 Deaths, and The Story of Dendreon”) demonstrating that Milken had worked with “captured” doctors to derail FDA approval for a promising cancer treatment while promoting less-than promising treatments from which they stood to profit. That story also demonstrated that there was a high probability that a small group of hedge funds, including SAC Capital, had not just traded on inside information about the FDA’s decisions, but had perpetrated manipulative short selling attacks on the stock of the company, Dendreon, that was manufacturing the promising cancer treatment.
I am no TV producer, but it seems to me that Wall Street miscreants trying to destroy companies with promising medical treatments (i.e. killing people, which is exactly what they are doing) is better television than miscreants merely “making a killing” on inside information. Or maybe not. It could be that the old narrative of Gordon Gecko, the greedy but charming rogue scoring the big bucks from his clever reading of inside information, is what people want to see on their TV screens—not the far uglier truth. Even the major U.S. news organizations seem intent upon portraying SAC Capital’s insider traders not as destructive miscreants, but as basically harmless rogues, perhaps even worthy of our respect and admiration.
During the three years while hedge funds were attacking Dendreon’s stock price and Milken was successfully scheming with FDA doctors to derail Dendreon’s cancer treatment (more specifically, a treatment for prostate cancer), more than 60,000 men who would have benefited from that treatment instead died before their time. In fact, Wall Street miscreants nearly destroyed Dendreon, but thanks largely to citizen activists (and not the media) who exposed the corruption that led to the FDA initially denying approval to Dendreon’s cancer treatment, the FDA did (albeit three years too late) finally approve the drug–so maybe it was a Hollywood ending, after all.
Either way, Wall Street miscreants are attacking many other companies with promising medical treatments…and nobody (aside from a few citizen activists) is watching.