Article Image

An assistant professor at the College of Physicians and Surgeons has been accused of providing confidential information to a hedge fund manager who is now being investigated for insider trading, the New York Times reported last week. Kidney specialist Andrew Bomback, P&S '03, provided Boston hedge fund manager James Silverman with nonpublic information about a study he conducted last year, according to an insider trading complaint filed against Silverman by the state of Massachusetts. Bomback told the Times that while he consulted for Silverman, he never shared insider information. He declined to be interviewed by Spectator. "Everything there is to comment on has already been commented," he told Spectator. Nonpublic Information Bomback researches novel therapies for specific kidney diseases, and in December 2009—the same month he was hired by Columbia—he started work on a retrospective case study of every patient in the United States who was known to have been given an H.P. Acthar Gel injection to treat a debilitating kidney disease known as nephrotic symptom. Silverman, the manager of the Newton hedge fund Risk Reward Capital Management, first contacted Bomback in June 2010 with the assistance of Guidepoint Global, an expert network firm for which Bomback served as a consultant. According to the complaint filed by Massachusetts' secretary of the commonwealth, Bomback told Silverman the results of the study in a phone conversation that June—five months before making it public at a conference of the American Society of Nephrologists. Bomback's study showed that the drug was very effective in treating nine of 11 patients who had a certain type of nephritic syndrome. Between June and September, Silverman invested over $800,000 in Questcor, the pharmaceutical company that manufactures the drug Bomback was studying. Secretary of the Commonwealth of Massachusetts William Galvin has charged Silverman with insider trading, for this and a few other alleged offenses. The case is still pending, according to Brian McNiff, a spokesman for Galvin. Bomback has not been charged. If he provided Silverman with the nonpublic information five months before presenting it publicly, as the complaint alleges, then he violated ASN's embargo policy, which prohibits researchers from disclosing findings before their public release. "On his own time" After reviewing the complaint, Columbia Law School professor John Coffee said he doubts a case will be filed against Bomback, because it is "debatable whether the prerequisite duty [of confidentiality] was breached," he said in an email. "But my bottom line conclusion is that his conduct was unethical where he knew the intent of the academic journal's rule," Coffee added. Doug Levy, a spokesman for the medical center, said any actions Bomback took in this case are "not a University matter," because they are tied to his outside activities, not his role as a University physician and researcher. "This has to do with his outside activities, not his role as a faculty member," Levy said. "What he does on his own time only becomes a matter of the University if it becomes a violation of the University policy." This is not the first time that Bomback's outside activities have been examined. In January 2010, one month after he started working at Columbia, Bomback signed a $50,000 per year consulting agreement with Questcor. But that April, the contract was revised to $10,000 per year to comply with University rules limiting faculty members' compensation for outside consulting. The insider trading case raises questions about which outside consulting activities are appropriate for faculty members, a widely discussed topic during the last year, as professors and administrators have debated changes to Columbia's conflict of interest disclosure policies. The Business School passed a policy last year requiring professors to disclose publicly all outside consulting activities, and the Faculty of Arts and Sciences is close to approving a similar policy. P&S professor Howard Worman, who has also served as a consultant for expert networks, said he is supportive of medical school faculty consulting with outside entities. "I'm not concerned if they follow all of the rules and don't break the law," he said. "We have people with very specific and particular expertise that could help society; why prohibit that?" But Paul Appelbaum, also a P&S professor, said that it is important to distinguish between different types of consulting activities. Many professors help develop new medications by serving on pharmaceutical companies' scientific advisory boards. This he said, is "arguably a reasonable role for physicians to play: without the products we don't have medicines to use to treat our patients." But other types of consulting are questionable, he said. "When a physician shares his or her knowledge with an investment company, that's a different kettle of fish. That doesn't advance health, that doesn't advance scientific knowledge," said Appelbaum, who serves on one of the medical school's conflict of interest committees. "That would appear to be a much more questionable endeavor on the part of an academic physician." Appelbaum said he was not familiar with the details of the Bomback case and so could not comment on it directly, but added that there is something "very odd" about a physician "selling information to a private company that intends to use it for its own or its clients' gain." "We are in this field to advance medical knowledge," he said. "That suggests that we ought not to selectively share information, but make it generally available." While medical center faculty have to disclose all outside consulting activities, including serving as consultants for expert networks, Levy said that there would be no way to determine how many Columbia Medical Center faculty members serve as consultants to expert networks. Qais Al Awqati, the chair of the nephrology department, declined to comment through a spokesperson last week. Gerald Appel, a prominent Columbia nephrologist with whom Bomback has previously authored articles, could not be reached for comment last week.

conflict of interest insider trading Medical School