Insider trading suspect out of U.S. jail as judge weighs 'Jekyll & Hyde' risk
By Nate Raymond
BOSTON (Reuters) - A former Akebia Therapeutics Inc employee accused of insider trading was released from jail on Thursday despite a judge's concern that the man's "Dr. Jekyll and Mr. Hyde" tendencies could lead him to violate his bail conditions.
U.S. Magistrate Judge Donald Cabell, who ordered Schultz Chan arrested on Sept. 22 after he failed to consistently report to his probation officer, ruled after asking Chan whether he would "make a fool out of me" and ignore court orders again.
"I remain concerned that this kind of Dr. Jekyll and Mr. Hyde part of Mr. Chan may have us at some point in a situation where all of a sudden his behavior is just going in the opposite direction," Cabell said in Boston federal court, referencing Robert Louis Stevenson's famed fictional character.
Cabell released Chan pending trial under previously imposed bail conditions.
"Mr. Chan, I'm taking a chance," Cabell said.
Chan, the former director of biostatistics at the Cambridge, Massachusetts-based biopharmaceutical company Akebia, told Cabell he would not make the same mistake twice.
"Prison is not a fun place to be in," he said.
Chan was arrested after he violated a bail condition Cabell imposed following hearings that were first prompted by prosecutors saying Chan's wife had booked airline tickets for herself, Chan and their daughter to fly to China.
At a hearing in July, Assistant U.S. Attorney Stephen Frank said Chan was becoming "increasingly unhinged" and was threatening prosecutors.
On Thursday, Frank objected to Chan's release and said he could flee the country. But Cabell said a mental evaluation of Chan did not show him to be a danger to anyone. Cabell said he believed that bail conditions could be set that would mitigate his risk of flight.
Prosecutors have said that from 2013 to 2015 Chan engaged in an insider trading scheme with a friend, Songjiang Wang, at rival drug company Merrimack Pharmaceuticals Inc.
Prosecutors said Wang tipped Chan ahead of announcements by Merrimack about clinical drug trial results, and Chan gave Wang information ahead of news of positive clinical study results for an Akebia drug.
An indictment said Chan also used inside information to trade in Akebia stock in 2015.
Both men have pleaded not guilty.
The case is U.S. v. Chan, U.S. District Court, District of Massachusetts, No. 16-cr-10268.
(Reporting by Nate Raymond; Editing by Scott Malone)
