The Cancer Genetics, Inc. insider trading case shows how the 1% profits from information the public never sees

Corporate Greed Case Study: Cancer Genetics, Inc. and Its Impact on Public Trust

A Rigged System That Promotes Insider Trading

For millions of people, investing in the stock market is a cornerstone of planning for the future—saving for retirement, a child’s education, or a home. This system relies on a fundamental promise: everyone has access to the same information. But the case of the Cancer Genetics, Inc. (CGIX) merger reveals the cynical reality that this promise is often broken.

While ordinary investors played by the rules, one man with privileged information was allegedly able to treat the market like his own personal ATM, reinforcing the painful belief that the game is, and always has been, rigged in favor of the wealthy and connected. The true victim here is public trust, a sentiment that, once lost, is nearly impossible to reclaim.

The Corporate Playbook: How the Harm Was Done

The strategy was simple and brutally effective. According to allegations from the Securities and Exchange Commission (SEC), a 74-year-old investor named Bruce Cameron Conway was given a golden opportunity. His investment adviser presented him with a chance to invest in a private biotech company that was about to merge with a publicly traded firm.

Before being told the name of the public company, Conway was informed the deal was confidential and was asked to sign a non-disclosure agreement. He agreed to confidentiality via email, claiming his printer was out of ink to avoid signing the form. Shortly after, he learned the public company was Cancer Genetics, Inc.

What followed was a calculated flurry of activity. On the very same day he invested in the private company, Conway allegedly began buying up shares of CGIX. This wasn’t a small, personal bet. He allegedly spread his purchases across fifteen different accounts belonging to himself, his wife, his son, his daughter, and various family trusts.

Over the next month, just before the merger was announced, he amassed over 48,000 shares. He had never purchased stock in this company before receiving the confidential tip.

A Cascade of Consequences: The Real-World Impact

The consequences of this alleged scheme became clear on August 24, 2020. When CGIX publicly announced the merger, its stock price skyrocketed. It closed at $6.25 per share, a 215% increase from the previous day’s closing price.

That very day, Conway began to sell. The value of the shares he had purchased across the fifteen family accounts had increased by approximately $160,000. This wasn’t a profit earned through savvy market analysis or patience; it was an instant windfall generated from information that was intentionally kept from the public.

This gain represents a direct transfer of wealth, siphoned out of the market’s integrity and away from ordinary investors who sold their shares without the benefit of knowing a merger was imminent. His average purchase price was just $2.99 per share and he was now selling in a market where the stock hit an intraday high of over $10.

A System Designed for This: Profit, Deregulation, and Power

This case is a textbook example of how neoliberal capitalism functions for those with access and power. The system is predicated on the relentless pursuit of profit, and within that framework, information becomes the ultimate commodity. When one individual can leverage a confidential tip to generate wealth equivalent to what many families earn over several years, it exposes a fundamental flaw in the structure of our economy.

Neoliberal capitalism is an economic ideology that privatizes gains while socializing losses and risks.

The lack of stringent, proactive enforcement and the normalization of treating financial penalties as a mere “cost of doing business” creates a fertile ground for such behavior. The system incentivizes finding and exploiting loopholes, with the rewards far outweighing the potential risks for the powerful. The very investment adviser who gave Conway the tip later admonished him for his actions, but by then, the alleged damage was already done.

Dodging Accountability: How the Powerful Evade Justice

The path to accountability highlights the two-tiered nature of our justice system. The SEC, a civil enforcement agency, is now seeking to have Conway return his “ill-gotten gains” and pay civil penalties. There is no mention of criminal charges. This is the standard playbook: the transgression is reframed not as a crime against the public, but as a financial dispute to be settled with money.

For the ultra-wealthy, a civil penalty is often a rounding error, a manageable expense for a profitable venture. It fails to address the rot at the core of the issue. Furthermore, when questioned by the SEC about his purchases, Conway asserted his Fifth Amendment rights against self-incrimination, a legal protection that allows him to avoid explaining his actions. This allows the powerful to sidestep public accountability, leaving the story to be told only through documents and allegations rather than direct testimony.

Reclaiming Power: Pathways to Real Change

A case like this should serve as a catalyst for systemic reform. True change requires moving beyond a reactive system of fines and disgorgements.

  • Strengthening Deterrents: Civil penalties must be drastically increased to a level where they are no longer viewed as an acceptable cost of business. Clawback provisions should be expanded to reclaim not just illicit profits but also salaries and bonuses of those involved.
  • Criminal Accountability: There must be a lower threshold for pursuing criminal charges in cases of clear-cut insider trading. The prospect of prison time is a far more potent deterrent than any financial penalty.
  • Empowering Regulators: The SEC needs more funding and authority to proactively police markets rather than just reacting to misconduct after the fact.

These ideas may cause me to get painted as a radical leftist, but they’re foundational requirements for any society that claims to value fairness and equality of opportunity over cronyism and elite privilege.

Conclusion: A Story of a System, Not an Exception

Ultimately, the story of the Cancer Genetics, Inc. merger emblematic of our neoliberal capitalistic system designed to create such outcomes. It reveals an economy where confidential handshakes and whispered tips can be more valuable than innovation, hard work, or public transparency.

As long as the rewards for exploiting the system are so high and the consequences so manageable, these stories will continue to be written, eroding what little faith remains in the fairness of our economic institutions.

All factual claims in this article were derived from the court complaint filed by the U.S. Securities and Exchange Commission in the case of SEC v. Bruce Cameron Conway in the U.S. District Court for the Northern District of Texas on August 7, 2025.

sec BRUCE CAMERON CONWAY mergerDownload

Please visit this SEC link to read the press release on this insider trading scandal: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26370

💡 Explore Corporate Misconduct by Category

Corporations harm people every day — from wage theft to pollution. Learn more by exploring key areas of injustice.

Post Views: 35
Aleeia
Aleeia

I'm the creator this website. I have 6+ years of experience as an independent researcher studying corporatocracy and its detrimental effects on every single aspect of society.

For more information, please see my About page.

All posts published by this profile were either personally written by me, or I actively edited / reviewed them before publishing. Thank you for your attention to this matter.

Articles: 1587