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(Adds comment from Merck spokeswoman in paragraph eight,updates court appearance status in paragraph six)
By Emily Flitter
NEW YORK, Oct 14 (Reuters) - Federal prosecutors in New Yorkcharged a former Merck & Co Inc employee with conspiracyto commit fraud for tipping a contact about potential mergers,including Merck's takeover of Idenix Pharmaceuticals ahead of apublic announcement in June, according to a court filing onTuesday.
In charging Zachary Zwerko, the filing referred only to "thepharmaceutical company where he was employed at the time." Buthis profile on the business networking site LinkedIn describeshim as a former senior analyst for Merck and his attorneyconfirmed that Zwerko worked at Merck during the relevantperiod. The lawyer declined to comment on the case.
The complaint said Zwerko, who was a senior finance analystin his company's financial evaluation and analysis group, passedinformation to a trader at an unnamed bank with whom he hadattended Rutgers Business School. The trader, who is not chargedin the complaint, allegedly traded on Zwerko's tips about Idenixand two other stocks: Ardea Biosciences and ViroPharma Inc.
Zwerko had access to a computer directory of informationabout potential acquisitions and learned Ardea and ViroPharmawere both potential targets, according to the complaint. He isalleged to have passed on tips to the trader by phone.
AstraZeneca announced a bid for Ardea in April 2012.Shire announced a takeover of ViroPharma in November 2013.
Zwerko was charged with one count of conspiracy to commitsecurities fraud, according to the filing. He was arrested inCambridge, Massachusetts on Friday and released on a $1 millionbond after an initial appearance in federal court in Boston onTuesday. He is required to appear in court in New York thisweek.
The U.S. Securities and Exchange Commission on Tuesday fileda corresponding civil complaint, which also did not nameZwerko's employer. According to the SEC complaint, Zwerko'scompany tried to protect confidential information by code-namingmerger projects. Its takeover of Idenix was code-named "ProjectInvincible."
A spokeswoman for Merck confirmed Zwerko worked for Merckand said Merck was cooperating with the SEC on the case.
According to LinkedIn, Zwerko left Merck in July. (Reporting by Emily Flitter; Editing by Chizu Nomiyama and TomBrown)
