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In the latest instance of alleged insider trading in the pharmaceutical industry, a former Puma Biotechnology executive was charged with illegally making more than $1.1 million by taking advantage of confidential information about clinical trials for a cancer drug.

Robert Gadimian, who was senior director of regulatory affairs, bought and sold Puma stock after learning about favorable study results for a medicine that was being tested to treat breast cancer, according to court documents filed by the US Securities and Exchange Commission on Thursday. The trades took place in 2013 and 2014 as results for two separate trials were distributed inside the company.

The biotech learned about his trades thanks to the Financial Industry Regulatory Authority, and then conducted an internal investigation. When interviewed during the probe, Gadimian admitted that he traded Puma stock due to “greed.” But before providing his trading records, he deleted certain trades and renumbered pages of the altered documents to hide the deletions. He was fired in October 2014.


“We allege that Gadimian used valuable confidential information about his employer’s drug trials to trade illegally and enrich himself,” said Antonia Chion, associate director in the SEC’s Division of Enforcement, in a statement.

Gadimian could not be reached for comment.


The former exec was able to take advantage of the study results after reviewing a confidential schedule for locking the data, which refers to capturing the data from a trial at a specific point in time. As the feds explained, this is essentially a way to take a snapshot of the results, which had to be analyzed to determine whether the drug was effective. Internal Puma emails described the data as “great news.”

According to the agency, Gadimian bought more than $261,000 in Puma stock in the summer 2013 during a so-called blackout period, a timespan in which employees were not supposed to alter their investments, after learning about positive trial results. After Puma released the findings, Puma stock rose 68 percent and Gadimian pocketed about $95,000.

In July 2014, shortly after learning that trial data had been locked and positive results would be announced shortly, Gadimian spent about $34,500 on Puma call options, which are securities that allow an investor to bet Puma stock price would soon increase. After the results were disclosed, Puma stock jumped 295 percent and he made slightly more than $1 million in profits, according to the SEC.

“All I need to know is the date,” Gadimian said in explaining how he proceeded, according to court documents. “I know the date, and that’s good enough for me for my trades.”

This alleged episode of insider trading is only the latest instance involving the pharmaceutical industry or those working with drug makers. The issue has increasingly raised concerns in connection with clinical trial work, as well as deal-making and the drug approval process, which some fear can be distorted by such activities.

In August, a principal investigator who ran a clinical trial for a Regado Biosciences drug was charged with insider trading after receiving bad news about the results. And last June, a former US Food and Drug Administration official pleaded guilty to securities fraud and three other crimes as part of a scheme to provide information to a high-profile hedge fund about upcoming agency approvals of generic drugs.

The same week, federal authorities charged that the former director of biostatistics at a small biotech called Akebia Therapeutics traded on information he learned about study results for a key drug while attending company meetings.

Also last June, a former Oppenheimer & Co. investment adviser was arrested on charges of trading on inside information supplied by a childhood friend who worked at Pfizer as director of chemical research and development, and received information about potential deals. He pleaded guilty to conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud.

Last year, Galena Biopharma agreed to pay $20 million to settle a shareholder lawsuit that accused the drug maker of a misleading marketing campaign and insider trading. And a year ago, a former Merck financial analyst was sentenced to three years in prison for insider trading after he allegedly misappropriated information about a pair of planned acquisitions and repeatedly tipped off a friend who worked at Bank of New York Mellon.

  • Interesting… I had no idea FINRA was watching us trade. After looking at, though, it seems clear that they are, at least on some level. I wonder if that’s how the guy at Akebia was found?

  • Ed, it should also be mentioned that his real name is Robert Ghadimian. He holds Iranian citizenship, thus not only were his profits illegal but if any of that money was moved into an Iranian bank account that would also be illegal as it would be considered doing business with a hostile country.

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