Federal authorities have filed charges against a former Pfizer employee and his close friend for engaging in illegal trading activities based on non-public trial results of Pfizer’s Covid antiviral pill, Paxlovid. The Justice Department and the Securities and Exchange Commission announced insider trading charges against Amit Dagar, a former senior statistical programming lead at Pfizer, and his friend Atul Bhiwapurkar. The charges allege that Dagar and Bhiwapurkar participated in an insider trading scheme, profiting from options trading using inside information about the yet-to-be-released Paxlovid results in November 2021.
According to the DOJ, Dagar, who had access to and analyzed Paxlovid clinical trial data, and Bhiwapurkar sold their Pfizer call options and made significant profits exceeding $350,000. Pfizer, in response, stated that the charges are related to the personal conduct of a former employee and that they are cooperating with the government’s investigation.
Dagar, 44, from Hillsborough, New Jersey, was arrested and charged with four counts of securities fraud and one count of conspiracy to commit securities fraud, while Bhiwapurkar, 45, from Milpitas, California, was arrested and charged with two counts of securities fraud and one count of conspiracy to commit securities fraud.
The SEC complaint alleges that on November 4, 2021, Dagar learned about the positive results of a mid-stage Paxlovid trial before they were publicly disclosed. The trial revealed that Paxlovid reduced hospitalization or death by 89% compared to the placebo in non-hospitalized high-risk adults. Dagar’s supervisor informed him through chat that the trial had a positive outcome and that a press release would be issued the next day. Dagar responded with excitement and subsequently purchased short-term, out-of-the-money Pfizer call options.
Prior to this incident, Dagar had not traded Pfizer options since 2018. He allegedly shared the successful results with Bhiwapurkar, who also purchased similar call options in Pfizer and tipped off another friend. When Pfizer released the Paxlovid data on November 5, 2021, the stock price increased by nearly 11%.
Dagar’s investment of $8,380 in Pfizer call options resulted in a one-day profit of approximately $214,395, representing a return of approximately 2,458%. Bhiwapurkar’s investment of $7,400 in call options generated a one-day profit of approximately $60,300. The unnamed individual, tipped off by Bhiwapurkar, made a one-day profit of approximately $29,770.
The SEC’s Market Abuse Unit Chief, Joseph Sansone, stated that Dagar misused his access to confidential trial results for personal gain. He added that Dagar and Bhiwapurkar leveraged this insider information to engage in lucrative options trading. The charges against them highlight the consequences of their actions driven by greed.
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