You are here

Justice News

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

FOR IMMEDIATE RELEASE
Wednesday, January 15, 2020

Entrepreneur And Pharmaceutical Company Executive Convicted At Trial For Role In International Insider Trading Scheme

Audrey Strauss, Attorney for the United States acting under authority conferred by 28 U.S.C. § 515, announced today that TELEMAQUE LAVIDAS was convicted after a one-week trial of illegally tipping his best friend and co-defendant Georgios Nikas with inside information he obtained from his father, a member of the board of directors of a pharmaceutical company. 

Deputy U.S. Attorney Audrey Strauss said:  “As the jury concluded, Telemaque Lavidas was a key player in a long-running international insider trading scheme.  Three times he received insider information from his father about Ariad Pharmaceuticals and passed it on to his friend Georgios Nikas, a criminal pipeline that earned its participants more than $15 million in illicit profits.  Lavidas now awaits sentencing for his crimes.”  

According to the allegations contained in the Superseding Indictment and evidence presented at trial:

Athanase Lavidas, the father of TELEMAQUE LAVIDAS, was a prominent Greek businessman and was a member of the board of directors of Ariad Pharmaceuticals, Inc. (“Ariad”), a pharmaceutical company headquartered in Cambridge, Massachusetts, that developed and marketed a leukemia medication named Iclusig.  In violation of his duties of confidentiality to Ariad, Athanase Lavidas provided TELEMAQUE LAVIDAS with tips about three major corporate developments at Ariad.  On each of those occasions, TELEMAQUE LAVIDAS provided that inside information to his best friend Georgios Nikas (“Nikas”) so that Nikas could make timely, profitable trades ahead of Ariad’s public announcements.

The first tip was in October 2013, when Athanase Lavidas learned that the U.S. Food and Drug Administration (“FDA”) was concerned about potential adverse health issues for patients from Iclusig.  Athanase Lavidas contacted TELEMAQUE LAVIDAS to pass this secret information, and TELEMAQUE LAVIDAS passed that tip to Nikas, who had previously amassed a large long position in Ariad securities.  After receiving the inside information from TELEMAQUE LAVIDAS, Nikas sold his Ariad securities and took a substantial short position.  When Ariad publicly announced the patient safety issues, its stock declined by over 65% and Nikas made over $3.2 million in profits and avoided almost $800,000 in losses.  Ariad discontinued sales of Iclusig later in October.

The second tip was in November and December 2013, when Athanase Lavidas learned that Ariad and the FDA were making significant progress toward returning Iclusig to the market.  Athanase Lavidas passed this secret information to TELEMAQUE LAVIDAS, who in turn passed the tips to Nikas.  Nikas bought Ariad securities based on these tips, and when Ariad publicly announced at the end of December that Iclusig was returning to the market, its stock rose and Nikas made over $1.3 million in profits.

The third tip was in July and August 2015, when Ariad received an unsolicited takeover offer from another pharmaceutical company.  Again, Athanase Lavidas learned of the offer in his capacity as a board member, and informed TELEMAQUE LAVIDAS, who in turn passed the tip to Nikas.  Nikas again bought Ariad securities based on this tip, and when a news article was published in late August reporting on the takeover offer, Ariad’s stock rose and Nikas made over $2 million in profits.

Nikas also passed the tips he received from TELEMAQUE LAVIDAS to a series of stock traders.  In total, Nikas and the traders he tipped earned over $15 million in profits from the inside information that TELEMAQUE LAVIDAS provided.

*                      *                      *

TELEMAQUE LAVIDAS, 39, of New York, New York, and Greece, was convicted of one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud and securities fraud, three counts of substantive securities fraud under Title 15, United States Code, Sections 78j(b) and 78ff, one count of substantive wire fraud, and one count of substantive securities fraud under Title 18, United States Code, Section 1348.  The conspiracy counts carry maximum prison terms of five and 20 years, respectively; the substantive wire fraud and Title 15 securities fraud counts each carry a maximum sentence of 20 years.  The substantive Title 18 securities fraud count carries a maximum sentence of 25 years.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the Court.

TELEMAQUE LAVIDAS is scheduled to be sentenced before Judge Cote on April 17, 2020, at 2:00 p.m.

Ms. Strauss praised the investigative work of the Federal Bureau of Investigation and also thanked the SEC.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Richard Cooper and Daniel Tracer are in charge of the prosecution.

Topic(s): 
Securities, Commodities, & Investment Fraud
Contact: 
Jim Margolin, Nicholas Biase (212) 637-2600
Press Release Number: 
20-019
Updated January 15, 2020