SEC charges Bristol-Myers Squibb executive with insider trading
WASHINGTON (Legal Newsline) - The Securities and Exchange Commission charged an executive at Bristol-Myers Squibb with insider trading on Thursday.
The SEC says the illegal trading took place as recently as just weeks ago. Robert Ramnarine is an executive in the treasury department at Bristol-Myers Squibb. He allegedly conducted his insider trading schemes from August 2010 to July 2012.
The SEC alleges that Ramnarine, who lives in East Brunswick, N.J., made more than $300,000 in illegal profits by misusing private information he obtained while helping Bristol-Myers Squibb evaluate the acquisition of three other pharmaceutical companies. He allegedly used multiple personal brokerage accounts to illegally trade in stock options of these potential target companies.
The complaint also states that prior to some trading, Ramnarine conducted Internet research from his Bristol computer to determine whether he could be detected by regulators. He searched for such phrases as "can stock option be traced to purchaser" and "illegal insider trading options trace" and viewed such articles as "Ways to Avoid Insider Trading," the SEC claims. Ramnarine even viewed a press release on the SEC's website announcing an enforcement action arising from illegal trading in call options in advance of an acquisition announcement, the SEC says.
"Ramnarine tried to educate himself about how the SEC investigates insider trading so he could avoid detection, but apparently he ignored countless successful SEC enforcement actions against similarly ill-motivated individuals who paid a heavy price for their illegal trading," said Daniel M. Hawke, Chief of the SEC Enforcement Division's Market Abuse Unit.
"Executives at pharmaceutical companies or in any industry should know better than to abuse confidential, market-moving information, and our charges against Ramnarine should serve notice that when you violate insider trading laws, no matter how you scheme, you will be caught."
The SEC is seeking to freeze Ramnarine's brokerage account assets and the U.S. Attorney's Office for the District of New Jersey also announced Thursday the arrest of Ramnarine in a parallel criminal action.
The SEC said that Ramnarine started to buy out-of-the-money call options while Bristol was finalizing its agreement with ZymoGenetics in late August 2010. Typically, investors will purchase call options when they believe the stock price will increase. Ramnarine made $30,551 by trading ZymoGenetics call options in advance of a Sept. 7, 2010 public announcement that Bristol-Myers Squibb was acquiring ZymoGenetics, the SEC says.