A former Pfizer Inc. employee was convicted of insider trading on Thursday after purchasing stock options in November 2021, just before Pfizer released clinical trial data for the COVID antiviral medication Paxlovid, federal officials said.
Authorities said a federal jury in Manhattan found Amit Dagar, 44, of Hillsborough, New Jersey, guilty of one count of securities fraud. Prosecutors claimed Dagar traded and tipped a friend on November 4, 2021, the day before the pharma company revealed that Paxlovid fared well in the trial.
Pfizer employee gamble with COVID-19 med has backfired
Authorities said a federal jury in Manhattan found Amit Dagar, 44, of Hillsborough, New Jersey, guilty of one count of securities fraud.
Prosecutors claimed Dagar traded and tipped a friend on November 4, 2021, the day before the pharma company revealed that Paxlovid fared well in the trial.
Damian Williams, United States Attorney for the Southern District of New York, announced today that a jury found AMIT DAGAR guilty of insider trading and conspiracy to commit insider trading. The defendant was found guilty after a two-week trial before United States District Judge Andrew L. Carter. U.S. Attorney Damian Williams 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.
U.S. Attorney Damian Williams
DAGAR worked for Pfizer Inc. (“Pfizer”) and helped manage data analysis in several clinical drug trials.
How the insider trading went down
In November 2021, DAGAR took part in an insider trading plan to profit illegally from options trading based on confidential knowledge about the outcomes of clinical studies of Paxlovid, a COVID-19 treatment. DAGAR worked for Pfizer Inc. (“Pfizer”) and helped manage data analysis in several clinical drug trials.
On November 4, 2021, DAGAR learned that a Pfizer trial of the medication Paxlovid, which is meant to treat mild to severe COVID-19 infection, achieved good results. The results were kept confidential until Pfizer made them public on November 5, 2021.
Later that day, while the results were kept private, DAGAR purchased short-term, out-of-the-money Pfizer call options that expired days and weeks later. DAGAR also advised a close friend to buy short-dated, out-of-the-money Pfizer call options.
Pfizer publicly announced the results of its Paxlovid trial the next day, on November 5, 2021, before the market opened. Following the release of the favorable data, Pfizer’s stock price rose significantly, starting — and eventually closing — more than 10% higher than the previous day’s closing price. DAGAR made more than $270,000 in the following weeks by selling his Pfizer call options.
DAGAR, 44, of Hillsborough, New Jersey, was found guilty of one count of securities fraud, carrying a maximum sentence of 20 years in prison, and one count of conspiracy to conduct securities fraud, carrying a maximum sentence of five years in prison.
Congress has set the maximum potential punishments, which are offered here solely for informative purposes, as the judge will determine the defendant’s sentence.
Mr. Williams applauded the FBI’s tremendous efforts. Mr. Williams also praised the U.S. Securities and Exchange Commission, which has filed a parallel civil case, for its support and cooperation with the investigation.
This matter is being handled by the Office’s Securities and Commodities Fraud Task Force. The prosecution is led by Assistant U.S. Attorneys Alex Rossmiller and Justin V. Rodriguez, with Paralegal Specialists Madeline Sonderby and Anna Gamboa providing support.
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