In the last instance of alleged insider trading in a former executive of Puma Biotechnology pharmaceutical industry was accused of illegally making more than $ 1.1 million for the use of confidential information on clinical trials of a cancer drug.
Robert Gadimian, who was senior director of regulatory affairs, bought and sold social Puma after the results of the favorable study for a drug that was being tested to treat breast cancer, according to documents cut presented by the US Securities and Exchange Commission on Thursday. The operations were conducted in 2013 and 2014 as a result of two separate trials were distributed within the company.
Biotechnology learned about their operations by the Regulatory Authority for the Financial Industry, and then conducted an internal investigation. When interviewed during the probe, Gadimian admitted that he negotiated Puma action because of “greed”. But before providing its trading records, which eliminates certain trades and renumbering pages of documents altered to hide deletions. He was fired in October 2014.
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“We allege that Gadimian uses valuable confidential information about drug trials your employer for illegal and enrich trade,” said Antonia Chion, associate professor of the Division of Enforcement of the SEC, said in a statement Director .
Gadimian could not be reached for comment.
The former executive was able to take advantage of the study results after reviewing a confidential program for the blocking of data, which refers to the capture of trial data at a specific point in time. As explained by the feds, this is essentially a way to take a snapshot of the results, which had to be analyzed to determine whether the drug was effective. Puma internal e-mails described the data as “great news.”
According to the agency, Gadimian bought more than $ 261.000 in Puma stock in the summer of 2013, during a period called blackout, a time interval in which it was not supposed to employees to alter their investments, after the results of positive tests. After Puma unveiled the results, Puma stock rose 68 percent and Gadimian pocketed around $ 95,000.
In July 2014, shortly after learning that the test data had been blocked and the positive results will be announced shortly, Gadimian spent about $ 34,500 for options Puma, which are securities that allow an investor to Puma bet the share price will increase soon. After the results were announced, Puma shares rose 295 percent and took a little more than $ 1 million in revenue, according to the SEC.
“All I need to know is the date,” Gadimian said in explaining how they proceeded, according to court documents. “I know the date, and that’s good enough for me for my operations.”
This episode of alleged insider trading is just the latest example, the participation of the pharmaceutical industry or those working with drug manufacturers. The issue has raised concerns increasingly regarding clinical trial work and deal-making and drug approval process, which some fear may be distorted by such activities.
In August, a principal investigator who led a clinical trial of a drug Watered Biosciences was charged insider after receiving bad news about the results. And last June, a former US Food and Drug Administration pleaded guilty securities fraud and three other crimes as part of a plan to provide information to a hedge fund high profile on approvals the next agencies generic drugs.
The same week, federal authorities accused the former director of biostatistics at a small biotech called Akebia Therapeutics trades on the information you learned about the study results of a key drug to attend business meetings.
Also in June, a former investment adviser Oppenheimer & Co. was arrested on charges of trading on insider information provided by a childhood friend who worked at Pfizer as director of research and development of chemical products, and he received information about possible deals. He pleaded guilty to conspiracy to commit securities fraud, conspiracy to commit wire fraud and securities fraud.
Last year, Galena Biopharma agreed to pay $ 20 million to settle a lawsuit by shareholders who accused the drugmaker of misleading marketing campaign and insider information. And a year ago, a former financial analyst at Merck was condemned to three years in prison for influence peddling after allegedly information misappropriated about a couple of acquisitions planned and repeatedly warned a friend who worked at the Bank of New York Mellon.Additional Tags for this post: