An ex-Pfizer employee and his close friend were arrested Thursday afternoon for an insider trading scheme that could land the men in prison for decades.
Prosecutors allege Amit Dagar, 44, leaked inside information on the clinical trials of the Covid-19 drug Paxlovid in order to receive illegal profits from trading.
The DOJ reported on November 4, 2021, Dagar received information that Pfizer’s Paxlovid drug received positive results in its clinical trials phase.
After gaining the knowledge Dagar “purchased short-dated, out-of-the-money call options in Pfizer stock.”
He then tipped his friend Atul Bhiwapurkar about the positive results of the trials and Atul also bought Pfizer call options.
On the next day Pfizer’s stock shot up 10% due to the results of the Paxlovid trials and Dagar along with Bhiwapurkar both sold their stock to amass close to $350,000.
A former Pfizer employee and his close friend were arrested Thursday morning on charges they illegally used insider information about breakthrough results from the trial of the pharmaceutical giant’s anti-covid medicine Paxlovid to profit off its stock. https://t.co/wBjI60BAYP
— The Washington Post (@washingtonpost) June 29, 2023
Per USA Today:
Amit Dagar, 44, is accused of abusing inside information about clinical trials of the COVID-19 medicine Paxlovid to receive illicit profits using options trading, according to a press release from the U.S. Attorney’s Office of the Southern District of New York.
Dagar, of Hillsborough, New Jersey, worked at Pfizer where he helped manage data analysis for some clinical drug trials. According to the release, Dagar found out that Pfizer’s trial of Paxlovid was successful around Nov. 4, 2021, but the results were confidential and were set to be publicized around Nov. 5, 2021.
Dagar purchased “short-dated, out-of-the-money call options in Pfizer stock” that same day, according to the release. He also told his friend, Atul Bhiwapurkar, about the positive results, leading Bhiwapurkar to also purchase call options that expired two weeks after. Bhiwapurkar told another friend about the situation, who is unnamed in the press release, who bought call options that expired three weeks after the purchase.
The DOJ has charged Dagar with “Four counts of securities fraud, each of which carries a maximum sentence of 20 years in prison.”
Bhiwapurkar was charged with two counts of securities fraud which also carries a maximum sentence of 20 years in prison for each count.
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