An executive of a California-based biopharmaceutical company was arrested yesterday and charged in U.S. District Court in Boston in connection with trading on insider information and profiting nearly $1 million.
Robert Gadimian, 46, of Burbank, CA, was indicted on seven counts of securities fraud and insider trading.
According to the indictment from November 2011 to October 2014, Gadimian was the Senior Director of Regulatory Affairs at Puma Technology, Inc., a biopharmaceutical company based in California whose principal focus was the development of a breast cancer drug called “neratinib.” Puma was involved in several ongoing drug trials for neratinib including one that a Massachusetts-based consulting firm was conducting for Puma.
The indictment further alleges that by virtue of his position at Puma, including his attendance at steering committee meetings and project team meetings related to ongoing drug trials, Gadimian learned sensitive, non-public information about the ongoing trials and made significant profits from trading on the inside information. Gadimian also did so in violation of Puma’s insider trading policy. Specifically, Gadimian allegedly profited approximately $95,000 in 2013 and approximately $1,060,000 in 2004.
Specifically, the indictment alleges that in July 2014, Gadimian purchased a series of short-term Puma call options in advance of a July 22, 2014 public announced that Puma achieved positive results during one of the trials. The following day, Puma’s stockprice jumped approximately 295 percent, and Gadimian then allegedly sold all the call options he purchased and profited $910,000 from his illegal trades.