A former Indian American employee of Pfizer has been found guilty of insider trading by a federal court in New York. Amit Dagar, residing in New Jersey, was convicted of obtaining “illicit” profits by trading on the results of Covid-19 medicine trials conducted by the pharmaceutical giant.
Dagar had worked for Pfizer and was responsible for aiding in the management of data analysis for specific clinical drug trials. Dagar’s conviction comes after a two-week trial under one count of securities fraud and one count of conspiracy to commit securities fraud last week.
Amit Dagar, a New Jersey resident, has been convicted of garnering “illicit” profits by trading results of Covid-19 medicine trials that the pharma giant undertook. Dagar worked for Pfizer as an employee responsible for assisting in managing data analysis in specific clinical drug trials.
Dagar’s conviction comes after a two-week trial under one count of securities fraud and one count of conspiracy to commit securities fraud last week.
According to court documents, in November 2021, Amit indulged in an insider trading scheme to “reap illicit profits from options trading based on inside information about the results of clinical trials of Paxlovid a medicine used to treat Covid-19”.
At that time, he was an employee of Pfizer and assisted in managing the data analysis in specific clinical drug trials.
On November 4, 2021, Dagar learned that a Pfizer trial of Paxlovid- a medicine designed to treat mild to severe COVID-19 infection- had produced positive results.
The results were confidential and meant to remain so until Pfizer publicized them the next day.
Later that same day, while the results remained confidential, he purchased short-dated, out-of-the-money Pfizer call options that expired days and weeks later.
Federal prosecutors said Dagar also tipped a close friend, who purchased similar call options.
The following day, Pfizer publicly released the results of its Paxlovid study before the market opening, and its stock price increased substantially, opening — and eventually closing — more than 10 per cent higher than the previous day’s closing price.
In the following weeks, Dagar sold his Pfizer call options for profits of more than USD 270,000, federal prosecutors alleged.
“As the jury’s swift verdict shows, the proof at trial was overwhelming that Amit Dagar stole information about Paxlovid from his employer, Pfizer, and used that illegal edge to profit in the stock market,” said US Attorney Damian Williams.
“Combatting the corruption of our financial markets continues to be a top priority of this Office,” he added.
A conviction in securities fraud carries a maximum sentence of 20 years in prison, while that in conspiracy to commit securities fraud carries a maximum sentence of five years in prison.
Source: PTI
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