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Executive Sentenced For Insider Trading Scheme

  (RPC) - 5/12/2015 - Former chief information officer of Foundry Networks, Inc. David Riley was sentenced on April 27 to 78 months in prison for his participation in an insider trading scheme that yielded approximately $39 million in ill-gotten gains. Foundary Networks is a California-based technology company that was acquired by Brocade Communications, Inc., in 2008. The sentence was imposed by U.S. District Judge Valerie E. Caproni.
   Riley was convicted following a 13-day trial in September 2014 in which the jury unanimously concluded that Riley passed inside information about Foundry’s acquisition by Brocade and about Foundry’s earnings for the first quarter of 2008 to Matthew Teeple, a former analyst for San Francisco-based hedge fund Artis Capital Management, L.P. Teeple pled guilty to related charges in May 2014 and was sentenced principally to 60 months in prison by U.S. District Judge Robert P. Patterson on October 16, 2014.
    “David Riley took advantage of his insider position at Foundry Networks to funnel sensitive nonpublic financial information to Matthew Teeple. This inside information enabled Teeple’s firm to reap nearly $40 million in illegal profits. This conduct has now earned Riley more than six years in federal prison," Manhattan U.S. Attorney Preet Bharara said
    According to the Superseding Indictment filed February 20, 2014, other court documents, and the evidence presented at trial: As CIO and a Vice President at Foundry, Riley had access to monthly and quarterly financial reporting, along with other sensitive, nonpublic information relating to Foundry, well before such information became public. RILEY provided this Inside Information to Teeple – sometimes by telephone and sometimes during meetings the two arranged in the San Jose, California, area. On several occasions, RILEY spoke with Teeple while logged into the database that Foundry used to maintain sensitive financial information. The Inside Information that Riley passed to Teeple included quarterly financial performance numbers during the first quarter of 2008 and information regarding Brocade’s intended acquisition of Foundry in July 2008.
   Teeple passed the Inside Information he obtained from Riley on to others, including others at Artis. From the Inside Information Teeple provided about Foundry, Artis ultimately reaped gains of approximately $39 million.  
   In addition to the prison sentence he received, Riley, 48, of San Jose, California, was ordered to pay a fine of $50,000.
   Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.
   Source: Financial Fraud Enforcement Task Force

Two over-the-counter drugs may reverse MS

   (NIH) - 4/24/2015 - Two drugs already on the market — an antifungal and a steroid — may potentially take on new roles as treatments for multiple sclerosis. According to a study published in Nature on April 20, researchers discovered that these drugs may activate stem cells in the brain to stimulate myelin producing cells and repair white matter, which is damaged in multiple sclerosis. The study was partially funded by the National Institute of Neurological Disorders and Stroke (NINDS), part of the National Institutes of Health.
   Specialized cells called oligodendrocytes lay down multiple layers of a fatty white substance known as myelin around axons, the long “wires” that connect brain cells. Myelin acts as an insulator and enables fast communication between brain cells. In multiple sclerosis there is breakdown of myelin and this deterioration leads to muscle weakness, numbness and problems with vision, coordination and balance.
   “To replace damaged cells, the scientific field has focused on direct transplantation of stem cell-derived tissues for regenerative medicine, and that approach is likely to provide enormous benefit down the road. We asked if we could find a faster and less invasive approach by using drugs to activate native nervous system stem cells and direct them to form new myelin. Our ultimate goal was to enhance the body’s ability to repair itself,” said Paul J. Tesar, Ph.D., associate professor at Case Western Reserve School of Medicine in Cleveland, and senior author of the study.
   It is unknown how myelin-producing cells are damaged, but research suggests they may be targeted by malfunctioning immune cells and that multiple sclerosis may start as an autoimmune disorder. Current therapies for multiple sclerosis include anti-inflammatory drugs, which help prevent the episodic relapses common in multiple sclerosis, but are less effective at preventing long-term disability. Scientists believe that therapies that promote myelin repair might improve neurologic disability in people with multiple sclerosis.    
   Adult brains contain oligodendrocyte progenitor cells (OPCs), which are stem cells that generate myelin-producing cells. OPCs are found to multiply in the brains of multiple sclerosis patients as if to respond to myelin damage, but for unknown reasons they are not effective in restoring white matter. In the current study, Dr. Tesar wanted to see if drugs already approved for other uses were able to stimulate OPCs to increase myelination.   
OPCs have been difficult to isolate and study, but Dr. Tesar and his colleagues, in collaboration with Robert Miller, Ph.D., professor at George Washington University School of Medicine and Health Sciences in Washington, D.C., developed a novel method to investigate these cells in a petri dish. Using this technique, they were able to quickly test the effects of hundreds of drugs on the stem cells.
The compounds screened in this study were obtained from a drug library maintained by NIH’s National Center for Advancing Translational Sciences (NCATS). All are approved for use in humans. NCATS and Dr. Tesar have an ongoing collaboration and plan to expand the library of drugs screened against OPCs in the near future to identify other promising compounds.
Dr. Tesar’s team found that two compounds in particular, miconazole (an antifungal) and clobetasol (a steroid), stimulated mouse and human OPCs into generating myelin-producing cells.
Next, they examined whether the drugs, when injected into a mouse model of multiple sclerosis, could improve re-myelination. They found that both drugs were effective in activating OPCs to enhance myelination and reverse paralysis. As a result, almost all of the animals regained the use of their hind limbs. They also found that the drugs acted through two very different molecular mechanisms. 
   “The ability to activate white matter cells in the brain, as shown in this study, opens up an exciting new avenue of therapy development for myelin disorders such as multiple sclerosis,” said Ursula Utz, Ph.D., program director at the NINDS.
   Dr. Tesar and his colleagues caution that more research is needed before miconazole and clobetasol can be tested in multiple sclerosis clinical trials. They are currently approved for use as creams or powders on the surfaces of the body but their safety administered in other forms, such as injections, in humans is unknown.
   “Off-label use of the current forms of these drugs is more likely to increase other health concerns than alleviate multiple sclerosis symptoms. We are working tirelessly to ready a safe and effective drug for clinical use,” Dr. Tesar said.
   Source: National Institutes of Health

Medical Data Theft: Is There an End in Sight?

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   (RPC) – 4/7/2015 - Details continue to emerge about the data breach reported last month by Premera Blue Cross, a breach which involved the personal medical records of roughly 11 million people. Some of those records go back more than 14 years. Premera's plight, unfortunately, is emblematic of a much broader crisis in health care data theft that has been building ever since the push toward digital health care record began – a situation which more than just a few of us in the media had raised questions about at the time.
   In February, 2015, insurance giant Anthem, Inc., reported the theft of data in December of 2014 involving an estimated 80 million current and former members, putting at lifetime risk anyone who has ever been a customer of Empire Blue Cross and Blue Shield, Caremore, Amerigroup, Unicare, Healthline, DeCare, Anthem Blue Cross and Blue Shield, and Blue Shield of Georgia.
   The Anthem theft is widely seen as one of the largest data thefts in U.S. history.
   While there is speculation on precisely what data was taken in the Premera Blue Cross case, the company cites Social Security numbers, clinical information, bank account information, birthdays, the names of applicants and their family members, and other contact and identification numbers as among the type of information that was stolen. Anthem said it does not have a reason to believe bank or credit card information was stolen, but does site income information, birth dates, Social Security numbers, email and address information.
   Premera is currently facing at last five separate class action suits. Anthem is facing numerous lawsuits as well, including one filed by St. Louis County in Missouri against Blue Cross Blue Shield. Three suits were filed against Anthem within a day after the breach was made public.
How sophisticated were the attacks? Not a sophisticated as they would have you believe, experts say.  In the Anthem incident, the company altogether avoided the encryption of sensitive customer data, with data thieves apparently making us of simple email “phishing” attacks, aimed at several employees which network access.
   In both cases, thieves were able to steal some of the most valuable data there is – people's Social Security numbers, birth dates, and addresses – data that rarely if ever changes and which can be used to commit fraud for many years to come.
   According to the Fifth Annual Study on Medical Identity Theft, the medical identify theft problem grew by approximately 22 percent this past year. The massive Anthem and Premera breaches will likely bump the percentage higher yet again this year. 
   The Secretary of the U.S. Health and Human Services Office for Civil Right is required by section 13402(w)(4) of the HITECH Act to post a lit of security breaching involving “unsecured protected health information affecting 500 or more individuals.
   A summary of the largest breaches since 2010, by name of covered entity and individuals affected, is as follows:
  • Anthem Inc. Affiliated Covered Entity (78,800,000).
  • Premera Blue Cross (11,000,000)
  • Science Applications International Corporation (4,900,000)
  • Community Health Systems Professional Services Corp. (4,500,000)
  • Advocate Health and Hospitals Corporation, d/b/a Advocate Medical Group (4,029,530)
  • Xerox State Healthcare, LLC (2,000,000)
  • IBM (1,900,000)
  • GRM Information Management Services (1,700,000)
  • AvMed, Inc. (1,220,000)
  • Montana Department of Public Health and Human Services (1,062,509)
  • Blue Cross Blue Shield of Tennesseek Inc. (1,023, 209)
  • Sulter Medical Foundation (943,434)
  • Horizon Healthcare Services, Inc., doing business as Horizon Blue Cross Blue Shield of New Jersey and its affiliates (839,711)
  • Iron Mountain Data Products, Inc. (800,000)
  • Utah Department of Technology Services (780,000)
  • AHMC Healthcare Inc. and affiliated hospitals (729,000)
  • Eisenhower Medical Center (514,330)
  • Triple-S Management, Corp; Triple-S Salud, Inc. (475,000)
  • Affinity Health Plan, Inc. (344,579)
  • Southerland Healthcare Solutions (342,197)
  • Emory Healthcare (315,000)
  • Touchtone Medical Imaging (307,528)
  • Shred-It International Incorporation (277,014)
  • Seacoast Radiology, PA (231,400)
  • Southern California Department of Health and Human Services (228,435)
  • Indian Health Service (214,000)
  • Digital Archive Management (189,489)
  • RCR Technology Corporation (187,533)
  • Millennium Medical Management Resources, Inc. (180,111)
  • Walgreen Co. (160,000)
   Of the top 100 largest data theft incidents to date, a quick count suggests that approximately 29 involved a compromised network server, eight involved computer desktops, 19 involved laptop computers, 23 involved some other type of portable device, 12 involved paper/films, three involved email, and seven involved some other type of electronic medical records.
   What do thieves want with your medical records? The answer is apparent in at least one other troubling trend this year, that being tax refund fraud, which has been reported at escalating levels nationwide. In addition to filing fraudulent tax returns,the U.S. Federal Trade Commission warns: “A thief may use your name or health insurance numbers to see a doctor, get prescription drugs, file claims with your insurance provider, or get other care. If the thief’s health information is mixed with yours, your treatment, insurance and payment records, and credit report may be affected.”
   Is there an end in sight to the health care and medical data theft trend, or has Pandora's Box been forever opened? Only time will tell.
   For further reference, see:  U.S. Department of Health and Human Services Office of Civil Rights Breach Portal; or the Federal Trade Commission - Medical Identity Theft.

Photo by Steve Rensberry (c) 2014