By Kate Perez June 29. 2023
Source: USA Today
Photo / Image Source: Unsplash,
A former Pfizer employee and his friend were arrested Thursday in an insider trading case after the worker allegedly leaked information about clinical trials of a COVID-19 treatment before it was publicly released, prosecutors say.
Amit Dagar, 44, is accused of abusing inside information about clinical trials of the COVID-19 medicine Paxlovid to receive illicit profits using options trading, according to a press release from the U.S. Attorney's Office of the Southern District of New York.
Dagar, of Hillsborough, New Jersey, worked at Pfizer where he helped manage data analysis for some clinical drug trials. According to the release, Dagar found out that Pfizer's trial of Paxlovid was successful around Nov. 4, 2021, but the results were confidential and were set to be publicized around Nov. 5, 2021.
Dagar purchased "short-dated, out-of-the-money call options in Pfizer stock" that same day, according to the release. He also told his friend, Atul Bhiwapurkar, about the positive results, leading Bhiwapurkar to also purchase call options that expired two weeks after.
Bhiwapurkar told another friend about the situation, who is unnamed in the press release, who bought call options that expired three weeks after the purchase.
What to know about Paxlovid:
Pfizer released the results of the Paxlovid study the next day, and its stock price increased, opening and closing over 10% higher than the Nov. 4 closing price. Following the publication, Dagar, Bhiwapurkar and the unnamed individual sold their Pfizer call options, making over $350,000.
Both Dagar and Bhiwapurkar were arrested Thursday morning. Dagar has been charged with four counts of securities fraud, which carry a maximum sentence of 20 years in prison each. He has also been charged with a count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
Beyond flu shots:
Bhiwapurkar, who is 45 and of Milpitas, California, was charged with two counts of securities fraud, which carries a maximum sentence of 20 years in prison each, along with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
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