You are here

Justice News

Department of Justice
U.S. Attorney’s Office
District of Massachusetts

FOR IMMEDIATE RELEASE
Tuesday, October 9, 2018

Methuen Physician Convicted of Insider Trading in Shares of Ariad Pharmaceuticals

BOSTON – A Methuen physician was convicted today by a federal jury of insider trading in the shares of Ariad Pharmaceuticals based on information gleaned from his spouse, who worked at the company.

Harold Altvater, 57, was convicted following a one-week jury trial of three counts of securities fraud. U.S. District Court Judge Denise J. Casper scheduled sentencing for Jan. 16, 2019.

The charges related to three occasions in late 2013 when Dr. Altvater misappropriated nonpublic information from his spouse about the safety of Ariad’s only marketed product, the leukemia drug Iclusig, as well as about the company’s negotiations with the U.S. Food and Drug Administration (FDA) concerning whether the drug would be permitted to remain on the market in the wake of serious adverse events that occurred during the drug’s clinical trials. At the time, Altvater’s spouse was the director of drug safety for Ariad. Without his spouse’s knowledge, Altvater then traded in Ariad shares in his personal accounts ahead of several critical announcements, avoiding losses and notching gains totaling approximately $115,000. In 2017, Ariad was acquired by Takeda Pharmaceutical Co., Ltd.

Today’s verdict marks the second time in three months that a Boston jury has convicted defendants of insider trading in the shares of local pharmaceutical companies. In July, two defendants, Schultz “Jason” Chan, 54, of Newton, and Songjiang Wang, 54, of Westford, were convicted of securities fraud and conspiracy to commit securities fraud in connection with a scheme to trade on inside information concerning their employers, Akebia Pharmaceuticals and Merrimack Pharmaceuticals, respectively. Chan and Wang are scheduled to be sentenced on Oct. 22 and Nov. 5, 2018.

In June 2018, a fourth pharmaceutical executive, Robert Gadimian, of California-based Puma Technology, Ltd., was sentenced to 27 months in prison after pleading guilty to seven counts of securities fraud in connection with trading on inside information in that company, earning profits of nearly $1 million.

The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $5 million. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Andrew E. Lelling and Harold Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Economic Crimes Unit and Special Assistant U.S. Attorney Michael Joseph Vito are prosecuting the case.

Topic(s): 
Securities, Commodities, & Investment Fraud
Component(s): 
Updated October 9, 2018