A former Pfizer employee has been charged with insider trading for leaking confidential trial results of the COVID-19 antiviral drug Paxlovid to a friend. Amit Dagar, a 44-year-old resident of Hillsborough, New Jersey, was arrested on Thursday and is facing multiple counts of securities fraud and conspiracy. Prosecutors allege that on November 4, 2021, Dagar informed his close friend Atul Bhiwapurkar about the promising results of a clinical trial for Paxlovid, which showed a significant reduction in hospitalization or death for high-risk COVID patients. Acting on this information, the duo purchased stock options that would skyrocket in value following Pfizer’s announcement of the successful trial results the next day. As a result, Pfizer’s shares surged 10 percent on November 5, 2021, reaching an all-time high in the subsequent weeks. Authorities claim that Dagar and Bhiwapurkar collectively made approximately $325,000 in illicit gains. Bhiwapurkar, a 45-year-old resident of Milpitas, California, was also arrested and is facing charges related to securities fraud and conspiracy. Dagar, who worked as a statistician for Pfizer, was not supposed to have prior knowledge of the Paxlovid trial results. However, he learned of the trial’s success from his boss, who gave him a warning about an upcoming announcement, instructing him to prepare for increased workload. Shortly after receiving this message, Dagar purchased $8,380 worth of short-dated, out-of-the-money call options in Pfizer stock, resulting in a profit of $270,000 when he sold them the next day, a staggering 3,000 percent gain. Similarly, Bhiwapurkar spent $7,426 on stock options that he sold for $76,000 the following day, reflecting a 900 percent profit. The indictment also mentions an unindicted co-conspirator identified as Individual-1, who made a $25,000 profit based on Dagar’s tip. It remains unclear whether Dagar and Bhiwapurkar have legal representation, and a spokesperson for Pfizer has yet to comment on the matter. The charges against them were revealed as part of a broader announcement of ten arrests in four separate insider trading cases unsealed on Thursday in the US District Court for the Southern District of New York. The other cases involved a police chief in Massachusetts, an executive director at an investment firm, and investors in a Special Purpose Acquisition Company (SPAC) that acquired Donald Trump’s media company. US Attorney Damian Williams emphasized that insider trading is not an easy way to make money, but rather a form of cheating. The three defendants involved in the Trump media company case allegedly made over $22 million through insider trading related to the SPAC that acquired Trump Media & Technology Group in a reverse merger. The charges outlined in the indictment state that the defendants were invited to invest in Digital World Acquisition Corp, a special purpose acquisition company. They were provided with confidential information indicating that Trump Media & Technology Group was a potential target for DWAC and another acquisition company, Benessere Capital Acquisition Corp. Subsequently, the defendants purchased millions of dollars’ worth of DWAC securities before the public announcement of the Trump media business, and then sold them for significant profits. The individuals arrested in this case were identified as Michael Shvartsman, Gerald Shvartsman, and Bruce Garelick, all residents of Florida. The representation for the defendants at their initial court appearances in Miami was not yet determined.
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