The Securities and Exchange Commission today charged the former Chief Financial Officer of pharmaceutical company Immunomedics, Inc. and his former romantic partner with insider trading in the company’s stock.
Herewith the, err, lowlights from the SEC legal action: while serving as CFO of Immunomedics, Usama Malik learned that the FDA had permitted the company to halt a clinical trial for a breast cancer drug because the existing trial data provided compelling evidence that the drug was effective. Malik – who was subject to a trading “black-out” that prohibited him and anyone living in his household from purchasing Immunomedics stock – immediately told Lauren S. Wood, with whom he lived at the time, as well as three family members. Wood and two of the family members then bought Immunomedics stock, as did an account in the name of the third family member’s spouse.
After Immunomedics announced the FDA’s decision, its stock price nearly doubled, resulting in a gain of $67,060 to Wood and a combined gain of approximately $21,000 to the family members. The complaint further alleges that, when Malik was asked about Wood’s trading as part of an inquiry by the Financial Industry Regulatory Authority (FINRA), he failed to identify her as his romantic partner and falsely claimed that he had not communicated with her during the relevant period.
“Public company executives have a duty to safeguard material non-public information and must not use it for their personal benefit, as we allege Malik did by tipping Wood and his family members,” said Joseph G. Sansone, Chief of the SEC’s Market Abuse Unit. “The Enforcement Division remains focused on detecting and investigating insider trading by public company executives.”
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, charges Malik and Wood with violating the antifraud provisions of the federal securities laws, and seeks against each of them a permanent injunction and civil penalty and, against Malik, an officer and director ban.
In a parallel action, the U.S. Attorney’s Office for the District of Jersey today announced criminal charges against Malik and Wood.
The SEC’s investigation was conducted by Tracy Sivitz and Vanessa De Simone of the Market Abuse Unit, and Elizabeth Baier of the New York Regional Office. Mr. Sansone has supervised the case. The SEC said it appreciates the assistance of FINRA.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Immunomedics CFO Charged with Insider Trading
The Securities and Exchange Commission today charged the former Chief Financial Officer of pharmaceutical company Immunomedics, Inc. and his former romantic partner with insider trading in the company’s stock.
Herewith the, err, lowlights from the SEC legal action: while serving as CFO of Immunomedics, Usama Malik learned that the FDA had permitted the company to halt a clinical trial for a breast cancer drug because the existing trial data provided compelling evidence that the drug was effective. Malik – who was subject to a trading “black-out” that prohibited him and anyone living in his household from purchasing Immunomedics stock – immediately told Lauren S. Wood, with whom he lived at the time, as well as three family members. Wood and two of the family members then bought Immunomedics stock, as did an account in the name of the third family member’s spouse.
After Immunomedics announced the FDA’s decision, its stock price nearly doubled, resulting in a gain of $67,060 to Wood and a combined gain of approximately $21,000 to the family members. The complaint further alleges that, when Malik was asked about Wood’s trading as part of an inquiry by the Financial Industry Regulatory Authority (FINRA), he failed to identify her as his romantic partner and falsely claimed that he had not communicated with her during the relevant period.
“Public company executives have a duty to safeguard material non-public information and must not use it for their personal benefit, as we allege Malik did by tipping Wood and his family members,” said Joseph G. Sansone, Chief of the SEC’s Market Abuse Unit. “The Enforcement Division remains focused on detecting and investigating insider trading by public company executives.”
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, charges Malik and Wood with violating the antifraud provisions of the federal securities laws, and seeks against each of them a permanent injunction and civil penalty and, against Malik, an officer and director ban.
In a parallel action, the U.S. Attorney’s Office for the District of Jersey today announced criminal charges against Malik and Wood.
The SEC’s investigation was conducted by Tracy Sivitz and Vanessa De Simone of the Market Abuse Unit, and Elizabeth Baier of the New York Regional Office. Mr. Sansone has supervised the case. The SEC said it appreciates the assistance of FINRA.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.