The US Securities and Exchange Commission (SEC) has filed insider trading charges against Amit Dagar, a former employee of Pfizer Inc., and his business partner Atul Bhiwapurkar. According to the SEC, Dagar and Bhiwapurkar's trading activities resulted in approximately $214,395 and $60,300 in illicit profits, respectively.
As per a release, the charges are related to trading activity that occurred before Pfizer's November 5, 2021 announcement regarding the success of a randomized, double-blind study for its COVID-19 antiviral treatment, Paxlovid. After Pfizer's CEO described the news as a ‘game-changer’ in the global fight against the pandemic, the company's stock price rose by nearly 11 per cent which was the largest single-day price movement for Pfizer's stock since 2009.
According to the complaint filed by the SEC, Amit Dagar held a senior position as a statistical program lead for the Paxlovid drug trial at Pfizer and used the information he obtained a day prior to purchase Pfizer call options with short expiration dates, including options that expired the following day.
Dagar was also accused of sharing the confidential information with his friend and business partner, Atul Bhiwapurkar, who also purchased similar call options in Pfizer. As a result, the duo achieved significant investment returns within just one day.
“As alleged in our complaint, Amit Dagar misused his access to confidential clinical trial results to enrich himself and his friend, Atul Bhiwapurkar,” said Joseph Sansone, chief of the Market Abuse Unit. “Dagar and Bhiwapurkar allegedly leveraged this information by trading out-of-the-money call options to generate massive one-day returns. Thanks to our surveillance, the defendants must now face the consequences of their greed.”