Thursday, February 16, 2012

Former Pharmaceutical Company Employee Charged with Insider Trading on Biotech Deals

A former employee of Takeda Pharmaceuticals International, Inc. has been charged after trading on inside information about the Japanese firm’s business alliances and corporate acquisitions. The employee reaped more than $63,000 of profits, achieving a 169% rate of return, by trading on non-public information about two business transactions in 2008.

He joined Takeda in January 2008 as a Director in its business development group and soon after began to misuse confidential corporate information for his personal benefit. In February 2008, he began placing trades in his personal brokerage account based on non-public information about Takeda’s proposed strategic alliance with Cell Genesys, which was announced in March. Then in March 2008, he made additional trades for his own account based on non-public information about Takeda’s plan to acquire Millennium, which was announced in April. He also traded on other confidential information in 2009 and 2010, purchasing call options in the securities of Arena Pharmaceutical, Inc., and AMAG Pharmaceutical, Inc., respectively, when the firms were engaged in confidential discussions on business transactions with Takeda. The employee, who was promoted to Senior Director of Takeda’s business development group in September 2010, resigned in May 2011.

“[He] was entrusted with highly confidential information of Takeda and betrayed that trust to line his own pocket,” said George S. Canellos, Director of the SEC’s New York Regional Office. “His is another cautionary tale of an employee who succumbed to greed and the delusion that he wouldn’t get caught.”

The employee has agreed to pay more than $136,000 to settle the SEC’s charges.

Former Pharmaceutical Company Employee Charged with Insider Trading on Biotech Deals
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