4 found guilty in insider trading case linked to CMS

Two former CMS officials and two partners at a New York City-based hedge fund were found guilty of insider trading charges May 3, according to Reuters.

In May 2017, prosecutors charged the four men with partaking in an insider trading scheme based on leaks from CMS between 2009 and 2014. On May 3, 2018, former CMS official Christopher Worrall was convicted of wire fraud and conversion of government property for allegedly leaking tips to David Blaszczak, another former CMS official and the founder of political consulting firm Precipio Health Strategies. 

Mr. Worrall's tips included information about upcoming reimbursement changes under federal insurance programs, including cuts to radiation cancer and dialysis treatment payments, Reuters reports. According to prosecutors' indictment, Mr. Blaszczak then passed the information on to Deerfield Management partners Rob Olan and Ted Huber, who used the intel to make profitable trades on companies affected by the changes.

The scheme concerned companies like Accuray, Varian Medical Systems, DaVita Healthcare Partners, NxStage Medical and Fresenius Medical Care.

In addition to Mr. Worrall's guilty verdict, a jury in Manhattan federal court convicted Mr. Olan, Mr. Huber and Mr. Blaszczak of counts including wire fraud, securities fraud and conversion of government property, Reuters reports.

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