Former Pfizer Employee Arrested for Insider Trading
A former employee of Pfizer has been arrested on insider trading charges for allegedly trading the drugmaker’s shares before it announced positive results from clinical trials of its COVID drug Paxlovid, US federal prosecutors said.
Prosecutors in New York allege Amit Dagar, 44, of New Jersey, learned Paxlovid had performed favorably on November 4, 2021, the day before the drug trial results were announced. He then tipped off a friend and purchased short-dated Pfizer stock options, making the pair a total of $350,000 (€) in illicit profits, prosecutors said.
Mr. Dagar was a senior statistical program lead for the Paxlovid drug trial, according to the US Securities and Exchange Commission’s parallel civil case.
A Pfizer spokesperson said the charges “relate to the personal conduct of a former Pfizer employee in violation of the company’s policies”, adding that the company is cooperating with the investigation. Patrick Smith, a lawyer who represents Mr. Dagar, said his client denies the allegations.
“Nobody at Pfizer ever told Mr. Dagar, who was on the ‘blinded’ side, the results of the Paxlovid trial,” he said, referring to the practice of running clinical trials without informing researchers which treatment is being administered.
The friend, Atul Bhiwapurkar, 45, of Milpitas, California, was also arrested on criminal charges and sued by the SEC. Michael Bachner, an attorney for Mr. Bhiwarpukar, said his client denies trading on inside information and based his decisions on publicly available information about the efficacy of the drug.
Mr. Dagar faces four counts of securities fraud and Mr. Bhiwapurkar two counts of securities fraud. Both are also charged with conspiracy.
The fraud charges carry maximum sentences of 20 years. The average sentence in federal fraud, theft, and embezzlement cases in the US last year was 22 months in prison.
In another case, prosecutors charged three men with trading shares of a special-purpose acquisition company ahead of its merger with a media and technology company founded by former US president Donald Trump.