FDA: October 2011 Archives
By way of Pharmalot:Cheng Yi Liang, 57, pleaded guilty yesterday to securities fraud and "making a false statement," after the SEC charged the former FDA chemist in March with insider trading (for background, go here). The maximum sentence for the first count is a 20-year prison term followed by a 5-year supervised release and a fine of $5 million. For count two, Liang could be imprisoned for 5 years and fined $250,000. An alternative fine could also be ordered for Liang, the plea agreement indicates: twice his gross gain or loss—or about $7.5 million by my calculation. A guilty plea also may endanger his immigration status (it is not stated in the agreement what Liang's immigration status is, however).
The plea agreement also argues that Liang's offenses are especially egregious because of the amount of money he earned through insider knowledge, the "sophisticated means" by which he earned it, and the fact that he was in a "position of public trust" as an FDA employee. Liang has evidently agreed to forfeit his $3,776,152 in gains through his TDAmeritrade and other accounts, as well as some vital real estate (eg, his residence in Gaithersburg, Maryland, and the home of his son, "A. L.").
Pharmalot also reports that Cheng Yi Liang's son, Andrew Liang, pleaded guilty last month to one count of possessing child pornography (yeesh), which was discovered in the government's investigation.
It's still not clear what tipped off the feds to the elder Liang's trading activities, but Derek Lowe's original thought about the profits Liang realized from the surprise approval of the antipsychotic iloperidone (Fanapt; Vanda Pharmaceuticals) remains highly plausible.
