Pharma Exec Charged With Insider Trading
August 2nd, 2012 // 5:06 pm @ jmpickett
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A Bristol-Myers Squibb executive was charged with insider trading for buying stock options in three drugmakers that were targeted for acquisition, according to a Federal Bureau of Investigation arrest complaint filed in federal court. Robert Ramnarine, 45, an executive director of pension and savings who lives in East Brunswick, was arrested this morning by the FBI, according to court documents .
Ramnarine allegedly made $311,361 in illegal profits even as he was responsible for conducting due diligence into pension and savings plans of three drugmakers that Bristol-Myers was eyeing for acquisition – ZymoGenetics, Pharmasset and Amylin Pharmaceuticals. According to the FBI, Ramnarine bought options in all three drugmakers. Bristol-Myers bought ZymoGenetics in October 2010 (see this) and Amylin in June (read here), but passed on Pharmasset, which was bought by Gilead Sciences.
According to the US Securities and Exchange Commission, Ramnarine used multiple personal brokerage accounts to illegally trade in stock options of the drugmakers. Prior to the trades, he conducted Internet research from his office computer to determine whether he could be detected by regulators. The SEC says he searched for such phrases as “can stock option be traced to purchaser†and “illegal insider trading options trace†and viewed articles such as “Ways to Avoid Insider Trading.†He also viewed a press release on the SEC website announcing an enforcement action arising from illegal trading in call options in advance of an acquisition announcement.
The SEC charges that Ramnarine made $30,551 in illegal profits by trading ZymoGenetics call options in advance of a Sept. 7, 2010, public announcement that Bristol-Myers was acquiring ZymoGenetics. The agency also alleges that he made $225,026 in illegal profits when he sold the calls immediately after the public announcement of Pharmasset’s sale, and made another $55,784 in illegal profits by trading Amylin put and call options in advance of the public announcement. The SEC is seeking a court order to freeze Ramnarine’s brokerage account assets (here is the SEC complaint).
This is only the latest instance of insider trading in the pharmaceutical industry. Earlier this year, FDA chemist Cheng Yi Liang was sentenced to five years in prison for insider trading. Liang, 58, used confidential information about upcoming announcements of 27 different FDA approval decisions involving 19 publicly traded companies over a five-year period, and generated more than $3.7 million in illegal profits for himself (read this).
And Brent Bankosky, a former senior director at Takeda Pharmaceuticals, also earlier this year agreed to pay more than $136,000 to settle charges that he traded on inside information about various business alliances and acquisitions. He worked at US headquarters in Deerfield, Illinois, garnered more than $63,000 in profits, which amounted to a 169 percent gain, by trading on non-public information about two deals in 2008
