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US: Indian-American Former Pfizer Employee Found Guilty Of Insider Trading On Covid Medicine Trial

10:38 AM Jan 25, 2024 IST | 8PM News Desk
us  indian american former pfizer employee found guilty of insider trading on covid medicine trial
US: Indian-American former Pfizer employee found guilty of insider trading on Covid medicine trial

Washington, DC [US] : Indian-American former Pfizer Inc. employee, Amit Dagar, who was charged with insider trading and a conspiracy to commit insider trading last year, has been convicted by the US Attorney for the Southern District of New York.

Damian Williams, the US Attorney for the Southern District of New York, announced on Thursday that a jury ‘returned a guilty verdict against Amit Dagar for insider trading and conspiracy to commit insider trading,’ as per a statement from Williams office.

Insider trading generally refers to buying or selling a stock or any financial assets on the basis of material, non-public information about them.

The defendant was found guilty following a two-week trial before US District Judge Andrew L. Carter.

US Attorney Damian Williams highlighted that proof has been found that Dagar stole information about Paxlovid from his employer, Pfizer, and used that illegal edge to profit in the stock market.

‘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. Combatting the corruption of our financial markets continues to be a top priority of this Office. Would-be insider traders tempted by the prospect of easy money should know that the Southern District of New York is watching; we’ll catch you, and we’ll make sure you pay the price for violating the law,’ he stated.

In November 2021, Dagar participated 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.

‘Dagar was an employee of Pfizer Inc. (‘Pfizer’) and assisted in managing the data analysis in certain clinical drug trials,’ as per the statement by the US Attorney for the Southern District of New York.

According to the regulator, Securities and Exchange Commission’s complaint, Dagar was a senior statistical program lead for the Paxlovid drug trial, which began in July 2021 as part of the company’s efforts to address the global health pandemic.

On November 4, 2021, Dagar learned that a Pfizer trial of the drug 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 publicised them on November 5, 2021.

Moreover, later that day, while the results remained confidential, Dagar purchased short-dated, out-of-the-money Pfizer call options that expired days and weeks later.

He ‘also tipped a close friend, who also purchased short-dated, out-of-the-money Pfizer call options,’ the statement added.

Later, on November 5, Pfizer publicly released the results of its Paxlovid study prior to the market opening. That same day, following the publication of the positive results, Pfizer’s stock price increased substantially, opening — and eventually closing — more than 10 per cent higher than the prior day’s closing price.

In the following weeks, Dagar sold his Pfizer call options for profits of more than USD 270,000, according to the statement.

Dagar, 44, a resident of Hillsborough, New Jersey, was convicted of one count of securities fraud, and now carries a maximum sentence of 20 years in prison, and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.

‘The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge,’ according to the statement.

Moreover, US Attorney Williams praised the commendable work of the Federal Bureau of Investigation and further thanked the US Securities and Exchange Commission, which has filed a parallel civil action, for its assistance and cooperation in the investigation.

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