Jesse Eisenger–a ProPublica reporter–published an excellent investigative piece this week in the New York Times about the salutary sales schedule of Questcor stock by its CEO, Don M. Bailey. It reveals how Mr. Bailey, who like other CEOs routinely sells stock on a set schedule to prevent the appearance of manipulation, benefits from curiously well-timed information releases by Questcor. According to Mr. Eisenger, positive information tends to issue from the company just before Mr. Bailey’s stock is scheduled for sale. This revelation would surely anger people, if they weren’t already resigned to the idea that fixes like this abound. In its first 24 hours at the high traffic nytimes.com, Eisenger’s article drew only 11 comments.
And that, despite including the following passage, which it is helpful to read aloud to the theme music from CNBC’s American Greed: “Questcor’s rise has been remarkable. The company sells an anti-inflammatory drug called Acthar, developed in the early 1950s and extracted from pig pituitary glands. Questcor bought the drug for a mere $100,000 in 2001 and then increased the selling price by orders of magnitude. The price of a five-milliliter vial jumped to $28,000 from $50.” Sounds painful for patients, but good for investors, right? Yet despite an unyielding focus on profit, Questcor is one of the five most shorted stocks on the NASDAQ.