You are here

Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of California

Monday, March 12, 2018

Jury Finds Stockbroker Guilty of Insider Trading for Dealing in Stock of Local Biotechnology Firm

Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384 Emily W. Allen (619) 546-9738


SAN DIEGO – A stockbroker was convicted of insider trading by a federal jury Friday, and a codefendant pleaded guilty this morning – the day his trial was set to begin.

The jury found stockbroker Paul Rampoldi guilty of conspiracy to commit insider trading, wire fraud, and money laundering, in connection with an illegal trade based on an insider tip about the merger of San Diego firm Ardea Biosciences, Inc. with multinational pharmaceutical company AstraZeneca.

Separately, William Scott Blythe, Rampoldi’s client who placed the trade and secretly paid Rampoldi his share of the profits in tens of thousands of dollars in cash, appeared in court this morning on the date set for his trial, and pleaded guilty to engaging in the same conspiracy. Blythe admitted in his plea agreement that the inside information came from Ardea’s then-director of Information Technology Michael Fefferman, and proved to be extremely lucrative – as the conspirators profited more than 1,500% from their illegal stock trades.

The evidence presented at trial showed that in April 2012, Ardea insider Fefferman learned that the company was planning to merge with AstraZeneca.  He also knew that this secret news would boost Ardea’s stock price by a hefty 50%. Before the merger was announced to the public, Fefferman passed the inside information on to his close friend and brother-in-law Chad Wiegand, a licensed stockbroker at National Planning Corporation (NPC).  Wiegand passed the information on to his coworker at NPC, Akis Eracleous, who was also a licensed stockbroker.  Eracleous, in turn, passed the tip to defendants Rampoldi and Blythe, and the three agreed (to avoid suspicion and scrutiny) that Blythe would trade on the information in his non-NPC brokerage account, and then they would all share the profits. 

On the Friday before the merger was announced publicly, Blythe bought more than $5,400 in risky Ardea stock options.  On Monday – the next trading day after the merger announcement was released – Blythe sold the options for nearly $89,000. Blythe distributed approximately $40,000 of the fraudulent proceeds in cash to Rampoldi and Eracleous to hide the paper trail, and paid $2,000 in cash to Wiegand to compensate him for the tip.  After Forbes magazine reported on Blythe’s spectacular earnings, the group realized an investigation was brewing, and they got together to work on their cover story to mislead the FBI and financial industry investigators.

Fefferman, Wiegand, and Eracleous were each charged previously, and each has admitted his involvement in the insider trading and agreed to cooperate with the investigation.  Rampoldi and Blythe are scheduled to be sentenced on May 25, 2018, at 9:00 am before U.S. District Judge Dana M. Sabraw.  The jury hearing Rampoldi’s case was unable to reach a verdict on two other counts facing him, so a status hearing is set for March 23, 2018, at 11:00 am before Judge Sabraw to discuss a possible retrial on those counts.


Paul Rampoldi                                                Age: 50           San Diego, CA

Scott Blythe                                                    Age: 53           San Diego, CA

Charges of Conviction

Conspiracy, in violation of 18 U.S.C. §371

Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.


Chad Wiegand, 15CR1462-DMS                   Age: 43           Lakeside, CA

Akis Eracleous, 15CR1462-DMS                  Age: 50           San Diego, CA

Michael Fefferman, 15CR1534-DMS            Age: 45           Escondido, CA


Federal Bureau of Investigation

Securities and Exchange Commission

Financial Fraud
Press Release Number: 
Updated March 12, 2018