New York – Earlier this week, two different news articles suggested that the fallout from the insider trading probe will likely involve regulation and increased calls for transparency. Gerson Lehrman is reportedly planning to hire a lobbyist to represent it in Washington and scientific journals are considering taking a closer look at the motivations of scientists submitting articles.
An article from Westlaw News & Insight published earlier this week suggested that Gerson Lehrman is looking for a lobbying firm to help make its voice heard in Washington should Congress consider legislation impacting the expert network industry. The ongoing insider trading investigation has seen eight people associated with Primary Global charged.
The sources for this piece of news are not named in the article. Though Gerson has “met with at least one lobbying group with strong ties to Democratic politicians on Capitol Hill”, the sources are not authorized to disclose the information to the media.
This wouldn’t be the first time that Congress has asked for an investigation into the industry. Five years ago the SEC, at the behest of Congress, examined the role consulting practices of doctors involved in clinical trials. The SEC’s investigation ultimately did not result in charges.
One doctor who did get in trouble for his practices was Yves Benhamou, who advised Human Genome Sciences Inc and allegedly leaked information about the company to Frontpoint Partners. Dr. Benhamou’s actions, and the recent broader investigation into insider trading has seemingly prompted the New England Journal of Medicine and 13 other research publications to consider requiring scientists submitting articles to disclose all payments they have received from hedge funds.
The idea will be discussed in June according to a New England Journal spokeswoman. The current editor-in-chief of the New England Journal called the news “premature” however as it is too early to say what the scientific publications will ultimately decide to do.
While it might be premature to mark either of these developments as definite, neither would be surprising. Earlier this week, Integrity wrote that we may see regulators impose guidelines on usage of expert networks by public market investors. Also, while current disclosure policies of the New England Journal require authors to reveal their financial activities that could be “broadly relevant” to their research, a more specific requirement in light of what has happened recently seems to make sense.