(Reuters) – A former chief financial officer of Immunomedics (NASDAQ:IMMU) Inc has been charged with insider trading for tipping his girlfriend ahead of positive clinical trial results for a new breast cancer drug, federal authorities said on Thursday.
The U.S. Department of Justice said Usama Malik likely gave nonpublic information to former Immunomedics communications chief Lauren Wood within 20 minutes of learning on April 2, 2020 that the Food and Drug Administration would let the company halt its trial for Trodelvy because of evidence the drug worked.
Wood, who had left the company four months earlier but lived with Malik, allegedly bought about 7,000 Immunomedics shares that night for $64,400, and sold them three months later for a $213,618 profit after the stock price more than quadrupled.
Authorities said Wood also doubled her money from exercising Immunomedics stock options, and returned $65,000 to Malik that he had given her for the exercise, while Malik tipped three family members who made $21,400 of illegal profit.
Malik, 47, and Wood, 33, both from Washington, D.C., were each charged with securities fraud, carrying a maximum 20-year prison term.
The U.S. Securities and Exchange Commission filed related civil charges against both defendants, describing Wood as Malik’s now-former girlfriend.
Lawyers for Malik and Wood did not immediately respond to requests for comment.
Gilead Sciences Inc (NASDAQ:GILD) bought Immunomedics for $20.6 billion in October 2020. Four months later, Malik became chief executive of privately-held Fore Biotherapeutics.
“Effective immediately, Usama Malik is no longer a director or chief executive officer of Fore Biotherapeutics,” the Philadelphia-based company said in a statement on Thursday.
Fore said it learned on Wednesday about the charges, and that they “in no way” relate to the company.