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A Securities and Exchange Commission investigation and a fresh batch of lawsuits are prompting more questions about whether anyone used inside information to unload Guidant Corp. shares before the company's stock began to slide.
The Indianapolis-based medical-device maker, which is riding a wave of bad news dating to last spring, disclosed Nov. 7 that the SEC launched "a formal inquiry" into certain product disclosures and stock trading.
That means the commission has questions about insider trading, and it's armed with the power of subpoena to find answers, according to Jeffrey Bailey, a former SEC attorney and current partner at the Indianapolis firm of Bose McKinney & Evans LLP.
"The only thing you investigate when you're looking at the trading is insider trading. They're looking to see if anybody was trading on material, non-public information," Bailey said.
SEC spokesman John Heine and Guidant spokesman Steve Tragash both declined to comment.
The scrutiny follows a torrent of sales by Guidant insiders since December, when the company announced an agreement to be acquired by New Jersey-based Johnson & Johnson for $25.4 billion, or $76 a share.
Since then, Guidant insiders have sold $132 million in company shares, according to records compiled by Matthew...