The U.S. Securities and Exchange Commission (SEC) recently charged two men from Rhode Island with insider trading in the securities of deal targets being pursued by the pharmaceutical company where one of them worked.
The SEC alleged that Michael J. Maciocio obtained confidential clinical and business data about other pharmaceutical firms being considered by his company for potential acquisitions and business relationships, and that he used this nonpublic information to trade in their stocks.
Maciocio made roughly $116,000 in illegal profits trading in such pharmaceutical companies as Medivation Inc. (NASDAQ: MDVN), Ardea Biosciences, and Furiex Pharmaceuticals.
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The agency further alleged that Maciocio illegally tipped his childhood friend, stockbroker David P. Hobson, who utilized the nonpublic information to realize at least $187,000 in illicit trading profits for himself and $145,000 for his customers.
Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit, commented in the report:
We allege that Maciocio and Hobson engaged in a multi-year insider trading scheme by repeatedly using the confidential information of Maciocio’s employer to place illicit trades. Given his years of experience in the securities industry, Hobson’s misuse of this highly sensitive corporate deal information represents an especially egregious violation of the law.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Maciocio and Hobson.
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