SEC Brings Insider Trading Charges Against Pfizer Employee and Business Partner

The Securities and Exchange Commission (SEC) announced insider trading charges against Amit Dagar, former employee of Pfizer Inc., and his close friend and business partner Atul Bhiwapurkar for illegal trading prior to the company’s November 5, 2021, announcement of successful results from a randomized, double-blind study of its COVID-19 antiviral treatment, Paxlovid. After the announcement, Pfizer’s stock increased by 11 percent - the largest single-day price move since 2009. Dagar worked as a senior statistical program lead for the Paxlovid drug trial and learned confidential information regarding the successful outcome of the trial the day before the announcement was made public. He proceeded to purchase short term, out-of-the-money call options in Pfizer and tipped Bhiwapurkar, who also purchased similar call options in Pfizer. As a result, Dagar and Bhiwapurkar were able to generate approximately $214,395 and $60,300 respectively in illicit profits which amounted to one-day investment returns of 2,458 percent and 791 percent. As a result of the SEC’s complaint, both Dagar and Bhiwapurkar are facing charges of violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5 thereunder and could be subject to injunctive relief, disgorgement with prejudgment interest, and civil penalties. The SEC’s investigation is ongoing. The U.S. Attorney's Office for the Southern District of New York has also filed criminal charges against the two accused.