Commission Again Uses Data Analytics to Uncover Insider Trading
Insider trading has long been a staple of the Commission’s enforcement program. Tracing back to cases such as SEC v. Texas Gulf Sulphur, 401 F. 2nd 833 (2d Cir. 1968)(en banc) the agency has pursued these cases with vigor and in its most recent case continuing to employ data analytics to help fret out such conduct.
One of the Commission’s most recent actions in this area is SEC v. Dagan, Civil Action No. 1:23-cv-05564 (S.D.N.Y. Filed June 29, 2023). The complaint names as defendants Amit Dagar, an employee assigned by his firm to work for Pfizer, Inc. on a drug trial, and Atul Bhiwapurkar, an engineer who was a close friend of Mr. Dagar.
The action centers on the results of a drug test being conducted by Pfizer, the results of which were announced on November 5, 2021. Mr. Dagar was a Senior Statistical Programming Lead at Pfizer. He was a member of the statistical team that compiled and organized data during Pfizer’s Paxlovid clinical trials. Mr. Dagar was “blinded” – the data to which he had access did not disclose if the patients received Paxlovid or a placebo.
Prior to the press release of the results for the Paxlovid trial, Mr. Dagar learned of them – the test had been a successful. Within hours Mr. Dagar purchased call options for Pfizer. He also tipped his friend, Mr. Bhiwapurkar about the success of the trial. Mr. Bhiwapurkar then traded the securities of Pfizer and tipped Friend A.
Following the November 5, 2021 press release of the trial results, the share price of Pfizer stock rose almost 11%. Mr. Dagar, who purchased $8,380 in Pfizer call options had a profit of $214,395. His friend Mr. Bhiwapurkar, who purchased 7,400 call options, had a profit of $60,300. Friend A, who also traded, had a profit of about $29,770. The complaint alleges violations of Exchange Act Section 10(b). The U.S. Attorney’s Office for the Southern District of New York filed parallel criminal proceedings. See Lit. Rel. No. 25787 (July 24, 2023).
Commission Again Uses Data Analytics to Uncover Insider Trading
Insider trading has long been a staple of the Commission’s enforcement program. Tracing back to cases such as SEC v. Texas Gulf Sulphur, 401 F. 2nd 833 (2d Cir. 1968)(en banc) the agency has pursued these cases with vigor and in its most recent case continuing to employ data analytics to help fret out such conduct.
One of the Commission’s most recent actions in this area is SEC v. Dagan, Civil Action No. 1:23-cv-05564 (S.D.N.Y. Filed June 29, 2023). The complaint names as defendants Amit Dagar, an employee assigned by his firm to work for Pfizer, Inc. on a drug trial, and Atul Bhiwapurkar, an engineer who was a close friend of Mr. Dagar.
The action centers on the results of a drug test being conducted by Pfizer, the results of which were announced on November 5, 2021. Mr. Dagar was a Senior Statistical Programming Lead at Pfizer. He was a member of the statistical team that compiled and organized data during Pfizer’s Paxlovid clinical trials. Mr. Dagar was “blinded” – the data to which he had access did not disclose if the patients received Paxlovid or a placebo.
Prior to the press release of the results for the Paxlovid trial, Mr. Dagar learned of them – the test had been a successful. Within hours Mr. Dagar purchased call options for Pfizer. He also tipped his friend, Mr. Bhiwapurkar about the success of the trial. Mr. Bhiwapurkar then traded the securities of Pfizer and tipped Friend A.
Following the November 5, 2021 press release of the trial results, the share price of Pfizer stock rose almost 11%. Mr. Dagar, who purchased $8,380 in Pfizer call options had a profit of $214,395. His friend Mr. Bhiwapurkar, who purchased 7,400 call options, had a profit of $60,300. Friend A, who also traded, had a profit of about $29,770. The complaint alleges violations of Exchange Act Section 10(b). The U.S. Attorney’s Office for the Southern District of New York filed parallel criminal proceedings. See Lit. Rel. No. 25787 (July 24, 2023).