Boston-Area Physician Arrested for Insider Trading
BOSTON – A Boston-area physician was arrested and charged with securities fraud for allegedly trading on inside information he learned from his wife, who worked at a Cambridge-based pharmaceutical company.
Harold L. Altvater, 55, of North Reading, was arrested today and indicted on three counts of securities fraud. He is scheduled to appear in federal court in Boston this afternoon.
According to the indictment, Altvater’s wife was a senior drug safety executive at Ariad Pharmaceuticals Inc., which was acquired earlier this year by Takeda Pharmaceutical Co. Ltd. From September 2013 to January 2014, Altvater’s wife shared nonpublic information with him concerning ponatinib, a drug used to treat certain forms of leukemia that was then in clinical trials. Ponatinib is marketed under the brand name Iclusig.
Without her knowledge, Altvater allegedly traded on the information regarding Ariad’s discussions with the Food and Drug Administration (FDA) concerning Iclusig’s label and the clinical trials. For example, the indictment alleges that on Oct. 2, 2013, Altvater’s wife met with FDA officials in Washington, D.C., who expressed concern about the incidence of adverse events that had been reported among patients enrolled in trials of the drug, which they noted were unprecedented in magnitude for a drug in Iclusig’s class. Over the next two days, after Altvater’s wife returned from her meeting, Altvater allegedly sold approximately 6,000 Ariad shares in his personal brokerage accounts. On or about Oct. 9, 2013, Ariad publicly announced that, in the wake of adverse events experienced by patients in clinical trials of Iclusig, it was pausing enrollment in clinical trials of the drug and reducing dosages for patients already enrolled in such trials. That same day, Ariad’s stock price declined by approximately 66 percent. The indictment alleges that by selling his Ariad shares prior to the October 9th announcement, Altvater avoided a loss of more than $75,000.
Altvater was previously sued by the Securities and Exchange Commission (SEC) in connection with the same conduct. Altvater’s wife settled charges with the SEC in connection with trades in Ariad securities executed in accounts in her name in 2012.
The charging statute provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the SEC. Assistant U.S. Attorney Stephen E. Frank, Chief of Weinreb’s Economic Crimes Unit, is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.