The former chief financial officer for a biopharmaceutical company today admitted his role in an insider trading scheme, U.S. Attorney Philip R. Sellinger announced.
Usama Malik, 48, of Washington, D.C., pleaded guilty today before U.S. District Judge John Michael Vazquez in Newark federal court to Count One of an indictment charging him with securities fraud/insider trading.
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Malik was among the first, and one of the few, employees who received material non-public information about the breast cancer drug before the public announcement. Within minutes of obtaining that information, Malik passed it along to Lauren S. Wood, 34, also of Washington, D.C. Wood lived with Malik at the time and was formerly employed by the same company as him. Before April 6, 2020, and within hours of receiving the insider information from Malik, Wood placed an order for approximately 7,000 shares of the company’s stock, despite the fact that during the same time period the company’s stock was downgraded by financial experts. After the company announced that its cancer drug had proven effective in pre-market clinical trials, its stock price increased. After selling her shares, Wood realized a significant profit.
The count to which Malik pleaded guilty is punishable by a statutory maximum penalty of 20 years in prison and a maximum fine of $5 million. Sentencing is scheduled for Sept. 18, 2023.
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