(Dmytro “Henry” Aleksandrov, Headline USA) Federal investigators charged a former Pfizer employee on Thursday after the latter was accused of insider trading related to the COVID-19 drug Paxlovid.
After federal investigators realized that Amit Dagar, 44, used his knowledge of Paxlovid trials to purchase stock in Pfizer ahead of the release of positive test results, they charged him with four counts of securities fraud and one count of conspiracy to commit securities fraud, the Daily Wire reported.
Aside from purchasing short-dated, out-of-the-money call options in Pfizer stock, Dagar also tipped his close friend, Atul Bhiwapurkar, about the coming drug results, which led to Bhiwapurkar also purchasing purchased short-dated, out-of-the-money Pfizer call options that expired around two weeks later, the Southern District of New York‘s Department of Justice’s office said.
This exchange resulted in Bhiwapurkar telling his other friend about the news. The friend followed the advice of Bhiwapurkar and purchased short-dated, out-of-the-money Pfizer call options that expired approximately three weeks later.
Bhiwapurkar was charged with two counts of security fraud and one count of conspiracy to commit security fraud. Both Dagar and Bhiwapurkar are accused of purchasing the stocks in November 2021 after the former saw positive results from the company’s testing of Paxlovid ahead of the public release.
“Insider trading is not a quick buck. It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison. Because my Office, the Southern District of New York, is watching,” U.S. Attorney Damian Williams said.
“And we’re working quickly to investigate and prosecute anyone who corrupts our financial markets. And we’ll keep at it as long as it takes. You can bet on that.”
Dagar and Bhiwapurkar made over $350,000 on the stocks after Pfizer released the testing data, which led to the company’s stock increasing by about 10%, according to the DOJ. If convicted, both of them could face 20 years in prison for each of the security fraud counts.
“The charges announced today center on the defendants’ alleged participation in illegal securities trading based on material, non-public information,” FBI official Michael Driscoll said.
“Insider trading schemes not only yield ill-gotten gains for those directly involved but also damage the public’s faith in the fairness of our financial markets.”
