A California federal jury found last month that a former InterMune director tipped off a friend about the pending European approval of the pharmaceutical maker’s lung disease drug. Thus handed the U.S. Securities and Exchange Commission (SEC) a win in its insider trading suit against the two men. Dr. Sasan Sabrdaran, a former director at InterMune, was accused of giving his friend Farhang Afsarpour confidential information about European drug approval for the company’s Esbriet medication, against the company’s policies and in violation of federal securities laws.
Andrew Ceresney, director of the SEC’s Division of Enforcement, said he was pleased with the jury’s verdict. The jurors found that Sabrdaran shared confidential information with his friend, who used it to earn $1 million in the stock market, “trading at the expense of ordinary investors who played by the rules. Ceresney said in a statement that “this jury verdict reaffirms our commitment to aggressively root out and prosecute insider trading schemes in order to protect the integrity of our markets.”
The SEC’s case rested on the timing of Afsarpour’s bets, which often coincided with phone calls and text message exchanges with his friend. Afsarpour bet on the Esbriet drug’s approval in December 2010, even though all public information and market analysis suggested the decision wouldn’t come down until the first quarter of the following year based on the standard 210-day timeline for these applications. Sabrdaran knew the drug’s application was progressing so smoothly, though, that InterMune had gotten approval to expedite the process.
It was argued by the lawyers representing the Defendants that those communications between the two friends were based on personal matters. They also said that anyone who looked on the European Union’s Committee for Medicinal Products for Human Use website would know that an earlier decision was possible, and argued Afsarpour bet cautiously, using limit orders so his purchases would only go through if the stock dropped to a low price and a stop-loss order that reduced risk by selling if the price dropped below a certain price once he’d bought it. At press time, the judge had yet to rule on remedies.
The case is U.S. Securities and Exchange Commission v. Sasan Sabrdaran et al. in the U.S. District Court for the Northern District of California.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.