U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 18264 / July 30, 2003


The Securities and Exchange Commission announced today that is has filed a civil injunctive action in the United States District Court for the District of New Jersey against Mark Fisch ("Fisch") and Edward Gregory ("Gregory") on charges of insider trading. The complaint alleges that Fisch and Gregory, two district sales managers at Wyeth, Inc. ("Wyeth"), sold shares of Wyeth after obtaining confidential, nonpublic information that a major clinical study had found increased health risks associated with Prempro, one of Wyeth's principal products. By selling shares in advance of the public dissemination of the negative news, Fisch and Gregory avoided losses. To settle the case, both defendants have consented to be permanently enjoined from violating the antifraud provisions of the Securities Act of 1933 ("Securities Act") and the Securities Exchange Act of 1934 ("Exchange Act"), to disgorge their losses avoided plus prejudgment interest, and to pay civil penalties.

Specifically, the Commission's complaint alleges that in July 2002, senior Wyeth officials learned that a portion of a large-scale long-term clinical trial, conducted by the National Institute of Health, on the health effects of hormone replacement therapies, was being terminated early because of findings that showed an increased risk of heart attacks, strokes, and breast cancer among patients taking Prempro. Fisch and Gregory were told that disappointing news by their supervisor during a conference call on the morning of July 8, 2002. Despite being told during the call and by e-mail that the information they were receiving was confidential and would not be made public until the following day, Fisch and Gregory sold their entire holdings of Wyeth stock shortly after learning the negative news.

On July 8, Fisch sold 3,000 shares of Wyeth stock at $49 a share, for a total of $147,000, and Gregory sold 1,000 shares at $49.16 a share for a total of $9,160. On July 9, after the negative news was made public, Wyeth stock opened at $45 and fell to $36.70, before closing at $37.30. By trading in advance of the negative news announcement, Fisch avoided losses of $35,100, and Gregory avoided losses of $11,860.

Without admitting or denying the Commission's allegations, both defendants have agreed to settle with the Commission by consenting to the entry of a judgment (a) enjoining them from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, and (b) ordering them to disgorge illicit profits, plus prejudgment interest, and pay civil penalties, as follows:

  • (1) Fisch will disgorge $35,100, plus prejudgment interest, and pay a civil penalty of $35,100; and

  • (2) Gregory will disgorge $11,860, plus prejudgment interest, and pay a civil penalty of $11,860.

SEC Complaint in this matter



Modified: 07/31/2003