Pfizer, Merck Deals Targeted In Insider Trading Probe

The government is investigating possible insider trading violations connected to some large drug company deals, including Pfizer Inc.'s acquisition of Wyeth and Merck & Co.'s planned takeover of Schering-Plough Corp.

The Securities and Exchange Commission also is looking at Abbott Laboratories' purchase of medical equipment maker Advanced Medical Optics and Eli Lilly & Co.'s takeover of biotech firm Imclone Systems Inc., the Wall Street Journal reports, quoting unnamed sources. About three dozen subpoenas were sent to hedge funds and brokerages as government investigators try to determine whether traders and deal advisers shared confidential information, the paper says.

At least nine deals are being scrutinized and they don't all include pharmaceutical makers. Best Buy Co.'s purchase last year of Napster Inc. and Triarc Co.'s takeover of Wendy's International Inc. are also being investigated, the Journal reports.

Other deals being looked at include: Sears Holdings Corp.'s failed attempt to buy Restoration Hardware; software maker Ansys Inc.'s takeover of Ansoft Corp.; and the privatization of nursing home operator Genesis HealthCare Corp. by private equity firms Formation Capital and JER Partners.

It's not clear whether subpoenas are related to the Galleon Group investigation, the Journal says. Some recent subpoenas are related to Goldman Sachs Group Inc.'s role in health care deals dating back to 2006, the paper says.