The U.S. Securities and Exchange Commission (SEC) recently charged the former senior director of regulatory affairs for Puma Biotechnology Inc. (NYSE: PBYI) with insider trading ahead of the company’s news announcements about its drug to treat breast cancer.
The agency alleged that Robert Gadimian pocketed more than $1.1 million in illicit profits by secretly purchasing Puma stock and short-term call options based on nonpublic information he learned about positive developments in two clinical trials for Puma’s drug, neratinib.
Gadimian allegedly bought Puma securities before the results from the first trial were announced in December 2013 and again before the results of the second trial were announced in July 2014.
According to the SEC’s complaint, Puma confronted Gadimian after learning about his trades and he admitted to trading because of “greed.” Gadimian allegedly proceeded to alter his trading records before providing them to Puma for its internal investigation, deleting certain trades in Puma securities and renumbering the pages of the altered documents to hide his changes.
Gadimian was fired in October 2014.
In a parallel case, the U.S. Attorney’s Office for the District of Massachusetts Friday announced criminal charges against Gadimian.
Antonia Chion, associate director in the SEC’s Division of Enforcement, commented:
We allege that Gadimian used valuable confidential information about his employer’s drug trials to trade illegally and enrich himself.
Shares of Puma closed Thursday at $66.06, with a consensus analyst price target of $86.00 and a 52-week trading range of $19.74 to $94.93.