A former pharmaceutical company executive and his former girlfriend have been charged with insider trading, the Securities and Exchange Commission announced in a news release last week.
The SEC filed a complaint in U.S. District Court against Usama Malik, the ex-Chief Financial Officer of Immunomedics, Inc. and Lauren S. Wood, with whom he once lived. At the time that he was the company CFO, the SEC said Malik learned that Immunomedics’ breast cancer drug had been found to be effective by the FDA following a clinical trial. Malik then allegedly informed Wood and three family members about the development and they purchased Immunomedics stock.
When the FDA’s decision was announced by Immunomedics, the company’s stock price nearly doubled. Authorities said Wood gained over $67,000, while two of the family members and the spouse of the third family member realized a combined gain of about $21,000. When Malik was questioned by FINRA, the SEC said he did not disclose his romantic relationship with Wood and falsely claimed he had not communicated with her about the stock. Malik and anyone living in his household were prohibited from purchasing stock in Immunomedics.
Joseph G. Sansone, Chief of the SEC’s Market Abuse Unit, released a statement that read in part, “Public company executives have a duty to safeguard material nonpublic information and must not use it for their personal benefit, as we allege Malik did by tipping Wood and his family members.”
Malik and Wood were charged by the SEC with violating the antifraud provisions of the federal securities laws. The commission is seeking a permanent injunction and civil penalty against each of them and an officer and director bar against Malik.
The U.S. Attorney’s Office for the District of New Jersey also announced criminal charges of securities fraud against Malik and Wood in a parallel action.
The attorneys at Lewitas Hyman have decades of experience dealing with various types of securities fraud cases that can cause harm to investors. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact our Chicago securities investment fraud lawyers at (312) 291-4600 or through our online contact form for a free consultation.