New York, Jan 24 (IANS): An Indian-American former Pfizer employee in New Jersey has been convicted of insider trading after he stole information from his employer and used it to reap illicit profits in the stock market.
Amit Dagar, 44, who assisted in managing the data analysis in certain clinical drug trials at Pfizer, was found guilty following a two-week trial last week, the United States Attorney for the Southern District of New York announced.
A resident of Hillsborough, he was convicted of one count of securities fraud, which 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.
Dagar participated in an insider trading scheme in November 2021 to reap illicit profits from options trading based on inside information about the results of clinical trials of Paxlovid, according to court proceedings and filings.
On November 4, 2021, he learned that a Pfizer trial of the drug Paxlovid -- a medicine used to treat mild to severe COVID-19 infections -- had produced positive results.
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.
A day after, Pfizer publicly released the results of its Paxlovid study before 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 US$270,000.
“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," US Attorney Damian Williams said.
"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,” Williams added.
This case was handled by the Office’s Securities and Commodities Fraud Task Force, and the sentencing of the defendant will be determined by the judge at a later date.