In a significant legal development, former Pfizer Inc. employee Amit Dagar has been convicted on charges of insider trading and conspiracy to commit insider trading. The conviction comes after a two-week trial before US District Judge Andrew L. Carter, with the announcement made by Damian Williams, the US Attorney for the Southern District of New York.
Amit Dagar, a 44-year-old resident of Hillsborough, New Jersey, was a senior statistical program lead for the Paxlovid drug trial at Pfizer. The trial aimed to address the global health pandemic caused by COVID-19 and began in July 2021. Dagar, responsible for managing data analysis in certain clinical drug trials, allegedly exploited his position to gain illicit profits from insider information.
On November 4, 2021, Dagar learned confidential information regarding positive results from a Pfizer trial on Paxlovid, a medicine designed to treat mild to severe COVID-19 infections. Instead of waiting for Pfizer to publicly disclose the results on November 5, Dagar engaged in insider trading activities.
On the same day he obtained the confidential information, Dagar purchased short-dated, out-of-the-money Pfizer call options, anticipating a surge in the stock’s value following the positive results. He also shared this information with a close friend who, in turn, made similar stock options purchases.
About Former Pfizer Employee Amit Dagar:
Following the public release of Pfizer’s positive results on November 5, the stock price surged over 10 percent higher than the previous day’s closing price. In the subsequent weeks, Dagar allegedly sold his Pfizer call options, reaping profits exceeding USD 270,000.
Dagar now faces serious legal consequences, having been convicted of one count of securities fraud and one count of conspiracy to commit securities fraud. The former charge carries a maximum sentence of 20 years in prison, while the latter carries a maximum sentence of five years. The sentencing will be determined by the judge, as prescribed by Congress.
US Attorney Damian Williams emphasized the overwhelming evidence presented during the trial, stating that Dagar had stolen information about Paxlovid from Pfizer and used that illegal advantage to profit in the stock market. Williams highlighted the commitment of his office to combatting corruption in financial markets and warned potential insider traders that the Southern District of New York is vigilant.
Williams praised the Federal Bureau of Investigation (FBI) for its commendable work in the investigation. He also thanked the US Securities and Exchange Commission (SEC), which filed a parallel civil action, for its assistance and cooperation in bringing the case to light.
The conviction of Amit Dagar serves as a stark reminder of the legal consequences associated with insider trading. As regulatory authorities and law enforcement agencies continue to crack down on financial misconduct, individuals tempted by the prospect of easy money through illicit means are put on notice – the repercussions are severe, and justice will be pursued.