The U.S. Securities and Exchange Commission (SEC) has announced that it filed insider trading charges against ex-Pfizer employee Amit Dagar and his business partner, Atul Bhiwapurkar, for trading before the announcement of a successful trial of the antiviral COVID-19 treatment Paxlovid,
“Dagar and Bhiwapurkar allegedly leveraged this information by trading out-of-the-money call options to generate massive one-day returns," Joseph Sansone, Chief of the SEC's Market Abuse, said in a news release on June 29. "Unit Thanks to our surveillance, the defendants must now face the consequences of their greed.”
According to the release, charges stem from their trading activities prior to Pfizer's announcement of successful trials of Paxlovid on Nov. 5, 2021. Following the announcement, Pfizer's stock price rose by nearly 11%, the largest one-day increase since 2009. Dagar, who worked on the Paxlovid trial, received non-public information of its success, then purchased Pfizer call options and notified Bhiwapurkar, who also bought similar call options. The SEC's case alleges that their trading resulted in unjust profits of approximately $214,395 and $60,300 for Dagar and Bhiwapurkar, respectively, according to the release.
“As alleged in our complaint, Amit Dagar misused his access to confidential clinical trial results to enrich himself and his friend, Atul Bhiwapurkar," Sansone said.
The SEC's Market Abuse Unit's Analysis and Detection Center, which employs data analysis tools to identify suspicious trading patterns, issued charges which including the violation of anti-fraud provisions, the release said. The SEC is seeking injunctions, disgorgement, and civil penalties, the agency added.
Along with the SEC charges, the U.S. Attorney's Office for the Southern District of New York filed criminal charges against Dagar and Bhiwapurkar, the release said. The SEC investigation is being led by Market Abuse Unit staff members Colby Steele and Patrick McCluskey, under the supervision of Paul Kim and Sansone, with the help of the U.S. Attorney's Office and the FBI, the SEC said.
