SEC Sues Ex-Hedge Fund Manager Goldfield for Insider Trading in MedImmune

A former hedge-fund manager who reaped $14 million trading on confidential information about the 2007 takeover of MedImmune Inc. will pay $600,000 to settle U.S. Securities and Exchange Commission claims, the agency said.

Stephen Goldfield of Odessa, Florida, learned about MedImmune’s search for a buyer from James Self, a drug company executive who looked into a possible acquisition, the SEC said today in a complaint filed at U.S. District Court in Pennsylvania. Goldfield bought 17,000 call options and 255,000 shares of MedImmune before the Gaithersburg, Maryland-based drug maker was acquired by AstraZeneca Plc, the SEC said.

Goldfield, 46, and Self, 45, agreed to settle without admitting or denying wrongdoing, the SEC said in a press release. Self, who works for Merck & Co. Inc., will pay $50,000.

The penalties reflect the financial condition of the two men, the SEC said, noting that Goldfield is unemployed.

“Mr. Goldfield is happy with settlement and looking forward to putting the matter behind him,” said his attorney, Robert Heim of Meyers & Heim LLP in New York.

John Grugan, Self’s attorney at Ballard Spahr LLP in Philadelphia, declined to comment.

Goldfield and Self met while attending the University of Pennsylvania’s Wharton School of Business in the mid-1990s. When MedImmune, maker of the FluMist vaccine, began shopping for a buyer in 2007, Self was assigned by his company to help conduct due diligence on a possible acquisition, the SEC said.

‘In the 50s’

In April 2007, Self’s firm submitted a bid to acquire MedImmune for $51 a share. In a telephone conversation that month, Self told Goldfield the “weather was in the 50s,” a message meant to convey the bid price, the SEC said. MedImmune was trading at about $35 a share at the time.

Goldfield made more than 30 trades in the weeks leading up to AstraZeneca’s April 23, 2007, announcement that it would buy MedImmune for $58 per share.

On April 20, 2007, one business day before AstraZeneca’s announcement, Goldfield purchased 2,300 call options. He made about $1.9 million from that trade, the SEC said.

By May 31, Goldfield had lost all his profit after betting that the shares would fall.

Self is still employed by Merck in Whitehouse Station, New Jersey, where he works in business development for the vaccines and infectious disease unit, the company said in a statement.

The case is SEC v. Self et al, U.S. District Court, Eastern District of Pennsylvania, No. 10-04430.

To contact the reporters on this story: Joshua Gallu in Washington at jgallu@bloomberg.net; Lorraine Woellert in Washington at lwoellert@bloomberg.net.