A former Pfizer employee, Amit Dagar, has been convicted of insider trading after a two-week trial in New York. Dagar was found guilty on one count of securities fraud, which could lead to a maximum sentence of 20 years, and one count of conspiracy to commit securities fraud, having a potential sentence of five years. These sentences are to be determined by the presiding judge.
Prior to his conviction, Dagar held the role of senior statistical program lead for the clinical trial of Paxlovid. Paxlovid, a Pfizer developed drug intended for the treatment of Covid-19, gained significance as the first oral Covid-19 antiviral approved by the FDA.
As on the record, Dagar was informed of positive clinical trial results ahead of the public announcement by his supervisor on November 4, 2021. Following this, Dagar promptly purchased options to buy Pfizer stock and tipped off his friend, Atul Bhiwapurkar, who enacted similar transactions. The next day, November 5, 2021, Pfizer announced the successful outcome of the Paxlovid trial with their press release, leading to an 11% rise in their stock – Pfizer’s largest single-day price move since 2009. Dagar and Bhiwapurkar subsequently sold their stock options making profits of around $214,395 and $60,300 respectively.
The case against Dagar was initiated by an SEC unit that employs data analysis tools designed to identify suspicious trading patterns. In June, the securities regulator charged Dagar and Bhiwapurkar with violations of the Securities Exchange Act of 1934. Following this, the U.S. Attorney’s Office for the Southern District of New York filed its own charges. In October, Bhiwapurkar pled guilty to securities fraud.
The U.S. Attorney, Damien Williams, in a prepared statement said, “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.”
More details on the case can be found on MedCityNews.