The former chief financial officer at a New Jersey-based biopharmaceutical company and his ex-girlfriend, who led communications for the business, were charged with insider trading of the company’s stock, federal officials said Thursday.
Usama Malik, then an executive for Immunomedics, tipped his former partner, Lauren S. Wood, that the company’s breast cancer drug had proven effective in pre-market clinical trials before the news was public in April 2020, according to court documents. He also allegedly shared the nonpublic information with some relatives.
Malik, 47, and Wood, 33, both of Washington, D.C., were arrested Wednesday and charged by federal prosecutors with securities fraud, Acting U.S. Attorney Rachael A. Honig said in a statement.
The Securities and Exchange Commission, which brings civil cases, also filed an insider trading complaint against the duo, the agency said.
Though not named in the criminal complaint, the SEC identified Malik as the former chief financial officer for Immunomedics, a Morris Plains company that was bought by Gilead Sciences for about $21 billion last year. A Gilead spokesperson declined to comment.
Within minutes of learning about the successful clinical trial for the Immunomedics cancer drug, Malik alerted Wood, who was living with him at the time and previously headed corporate communications at the company, according to federal authorities.
Wood placed an order for about 7,000 shares of Immunomedics within hours of the tip despite it being downgraded by financial analysts before the results were announced in a news release, the complaint said. After the purchase, the company publicly announced its positive results from the trial and the stock price increased.
For her part, Wood more than doubled her investment, making gross profits of $213,618 while she returned $65,000 to Malik, the criminal complaint said.
Malik failed to disclose his relationship with Wood when asked during an inquiry by the Financial Industry Regulatory Authority and falsely claimed he did not communicate with her, according to the SEC’s complaint.
The SEC also accused Malik of violating a “black out” period that barred him or anyone in his household from buying Immunomedics stock.
Unnamed family members who Malik also tipped off made about $21,000 in profits from their trades, the complaint alleged.
Malik’s recent employer, Fore Biotherapeutics, said he started at the Philadelphia-based firm in February and was no longer employed.
“Effective immediately, Usama Malik is no longer a Director or Chief Executive Officer of Fore Biotherapeutics,” a statement from the company said.
“The company became aware yesterday of charges brought against Mr. Malik related to trading in public company securities. The charges in no way relate to privately-held Fore Biotherapeutics, its employees or operations, and Fore Biotherapeutics expects no impact to such operations,” the statement added.
Attorneys for Malik and Wood could not be immediately reached to comment Thursday.
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Noah Cohen may be reached at firstname.lastname@example.org.