World News | 2 people of Indian origin charged in US with insider trading with Pfizer COVID-19 drug

NEW YORK, July 1 (PTI) — Two individuals of Indian origin, including a former Pfizer employee, have been charged by federal authorities with insider trading for their scheme to reap illicit profits by trading information on clinical results of COVID-19 drugs against the pharmaceutical giant. test.

Former Pfizer employee Amit Dagar and his close friend and business partner Atul Bhiwapurkar were indicted Thursday by the U.S. Securities and Exchange Commission (SEC) on charges they planned to use insider Trading for illegal profits.

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At the same time, the U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against the two.

Dagar, 44, of Hillsboro, N.J., was arrested Thursday and charged with four counts of securities fraud, each of which carries a maximum penalty of 20 years in prison, and one count of conspiracy to commit securities fraud, which carries a maximum penalty of 20 years in prison. It is punishable by 20 years’ imprisonment. Sentenced to five years in prison.

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Bhiwapurkar, 45, of Milpitas, Calif., was also arrested Thursday and charged with two counts of securities fraud and one count of conspiracy to commit securities fraud.

Authorities alleged that in November 2021, Dagar and Bhiwapurkar were involved in an insider trading scheme to make illegal profits from options trading based on inside information on the results of clinical trials of Paxlovid, a drug used to treat COVID-19.

The trial of the drug, for which Dagar is head of the advanced statistics program, began in July 2021 as part of the company’s efforts to respond to the global health pandemic.

According to the SEC complaint, the companies traded before Pfizer announced the success of its randomized double-blind study of an antiviral treatment for COVID-19 on Nov. Public Information Parks Lowe’s Bulletin.

Specifically, the SEC alleges that Dagar’s supervisor told him via chat that “we’ve got the results,” that “there’s a lot of work to do,” and that “there’s a press release coming tomorrow,” to which Dagar responded, “Oh Really” and “kinda exciting.”

Pfizer’s shares rose nearly 11 percent, their biggest one-day gain in the stock since 2009, after Pfizer’s chief executive called the news a “game changer” for global efforts to “stop the devastation of the pandemic.”

Hours after that trade, Dagar allegedly bought short-term out-of-the-money Pfizer call options, including options that expire the next day, before tipping off to Bivapurka, who also bought a similar call on Pfizer. options.

It also alleges that Dagar and Bhiwapurkar’s transactions generated illicit profits worth approximately $214,395 and $60,300, respectively, representing a single-day return on investment of 2,458 percent and 791 percent.

Joseph Sansone, head of the Market Abuse Unit, said: “As alleged in our complaint, Amit Dagar abused his access to confidential clinical trial results to benefit himself and His friend Atul Bhiwapurkar for his benefit.”

“Dagar and Bivapurkar allegedly used this information to generate huge one-day returns by trading out-of-the-money call options,” Sansone said.

The SEC filed a lawsuit in the U.S. District Court for the Southern District of New York alleging that Dagar and Bhiwapurkar violated the antifraud provisions of the Securities Exchange Act of 1934 and the Exchange Act Rules, and seeking injunctive relief, restitution, along with prejudgment interest, and civil compensation. punishment.

(This is an unedited and auto-generated story from a syndicated news feed, the latest staff may not have revised or edited the body of content)