(Recasts lead, adds details about cases and that Gadimian's
lawyer declined comment.)
By Suzanne Barlyn
WASHINGTON, Sept 29 A former executive for
biopharmaceutical company Puma Biotechnology Inc was charged on
Thursday by the top U.S. securities regulator and prosecutors
with trading on inside information ahead of a company
announcement about its breast cancer drug.
Robert Gadimian, former regulatory affairs director for Los
Angeles-based Puma, pocketed more than $1.1 million by secretly
trading on Puma stock based on non-public information he learned
about positive developments in two clinical trials for the
company's drug, Neratinib, the SEC said in a statement.
A U.S. grand jury in Boston on Thursday also indicted
Gadimian on felony charges of insider trading, according to
A lawyer for Gadimian declined to comment. Gadimian could
not be reached by phone and did not immediately reply to an
email requesting comment.
Gadimian, through his role at Puma, was privy to non-public
information about Neratinib, a breast cancer treatment drug, the
SEC said in a complaint. Gadimian learned about drug trials
involving Neratinib, including that it performed well and
reached "key milestones that would soon be made public," the SEC
Neratinib, as a result, was likely to be a lucrative drug
for Puma, the SEC said.
Gadimian bought Puma securities before results from the
first Neratinib drug trial were announced in December 2013 and
again before the results of a second trial were announced in
July 2014, the SEC said.
Through a series of secret trades, without company
permission and during periods in which employees were not
allowed to trade, Gadimian made about $1,161,000 in profits, the
Puma launched an internal investigation after learning of
some of Gadimian's trading through an inquiry by the retail
brokerage industry-funded watchdog, the Financial Industry
Regulatory Authority (FINRA), the SEC said.
Gadimian, of Burbank, California, traded the securities
through an account at Boston-based Fidelity Brokerage Services,
LLC, according to court documents.
Gadimian admitted to Puma that he traded in the securities
during the periods and that he traded because of "greed," the
SEC said. Gadimian also deleted certain Puma trades from his
trading records before giving them to the company's
investigators, the SEC said.
Puma fired Gadimian in 2014, the SEC said.
A spokesperson for Puma, which is not alleged to have
engaged in wrongdoing, could not be reached for comment.
(Reporting by Suzanne Barlyn and Timothy Ahmann; Editing by
Eric Beech and Alistair Bell)