The Securities and Exchange Commission (SEC) filed suit against Michael J. Fefferman, a Senior Director of Information Technology for Ardea Biosciences, Inc. (Ardea). The SEC alleged that Mr. Fefferman leaked non-public information regarding pharmaceutical trials to his brother-in-law, Chad Wiegand, who passed the inside tip to another stockbroker. Between April 2009 and April 2012, Mr. Fefferman allegedly tipped Mr. Wiegand about four separate announcements beforehand that were likely to have a positive impact on Ardea stock prices. The SEC alleged that the Defendants received $550,000 in illegal profits from this insider trading scheme.
The first announcement concerned a global agreement with Bayer Healthcare, LLC related to the licensing of an Ardea developmental cancer treatment. The second announcement related to the initial testing of a promising drug for the treatment of gout. The third announcement provided positive news about the second phase of testing for the experimental gout treatment. Finally, the fourth announcement published news of the sale of Ardea to AstraZeneca. The price of Ardea stock increased with each announcement and the Defendants allegedly profited illegally from trading of Ardea stock with the non-public information.
According to the SEC, after Mr. Fefferman shared this information with his brother-in-law, he purchased Ardea with his brokerage customers and earned commissions on the transactions. The SEC alleged that Mr. Wiegand also provided the non-public information to another friend at his firm who passed the tips to other investors.
The SEC charged Mr. Fefferman and the other Defendants for allegedly engaging in an insider trading scheme in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5. The SEC is seeking permanent injunctions against all of the Defendants for further violations of the securities laws, disgorgement of all of the illegal profits and civil penalties, which could be as great as three times the amount of ill-gotten gains.
Attorney Pearce began his career at the SEC as an enforcement attorney more than 35 years ago. His SEC defense law practice clients have included public companies and their officers and directors, broker-dealers, investment advisors, and individuals being investigated in connection with their personal securities transactions. He has broad, extensive experience in matters arising from alleged 10b-5 fraud violations including, “insider trading,” Section 16(b) “short swing profit,” and Section 14 “proxy rule” violations as well as Section 9 “market manipulation” cases.
Have you have been contacted by the SEC or believe that you may be the subject of an SEC investigation? If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends various individuals and entities who may be the subject of an SEC investigation or enforcement action regarding alleged involvement in securities laws violations.
This blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.