Biopharmaceutical Company Executive Sentenced for Insider Trading
BOSTON – An executive of a California-based biopharmaceutical company was sentenced yesterday in federal court in Boston in connection with trading on insider information and profiting nearly $1 million.
Robert Gadimian, 48, of Burbank, Calif., was sentenced by U.S. District Court Judge William G. Young to 27 months in prison, two years of supervised release and ordered to pay a fine of $25,000. In November 2017, Gadimian pleaded guilty to seven counts of securities fraud and insider trading.
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.
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. Gadimian traded on that inside information and made significant profits, in violation of Puma’s insider trading policy. For example, in July 2014, Gadimian purchased a series of short-term Puma call options in advance of a July 22, 2014, public announcement that Puma achieved positive results during one of the trials. The following day, Puma’s stock price jumped approximately 295 percent, and Gadimian then sold all the call options he purchased and profited $910,000 from his illegal trades. In total, Gadimian made profits of $95,000 in 2013 and $1,060,000 in 2014.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The U.S. Securities and Exchange Commission provided assistance in bringing this case. Assistant U.S. Attorney Neil J. Gallagher Jr. of Lelling’s Economic Crimes Unit prosecuted the case.