SEC Charges Five With Insider Trading Over 2011 Gilead Deal
September 28 2015 - 12:43PM
Dow Jones News
By Chelsey Dulaney
The Securities and Exchange Commission on Monday charged five
Florida residents, including two lawyers and an accountant, with
insider trading ahead of Gilead Sciences Inc.'s 2011 acquisition of
Pharmasset Inc.
The SEC said attorneys Robert L. Spallina and Donald R. Tescher
and accountant Steven G. Rosen traded on information obtained from
a mutual client who served on the board of Pharmasset. According to
the SEC, the Pharmasset board member and his advisers, including
Messrs. Spallina, Tescher, and Rosen, talked about Pharmasset's
negotiations to sell the company during a meeting about tax and
estate planning on Nov. 8, 2011.
Afterwards, Messrs. Spallina, Tescher, and Rosen allegedly
bought Pharmasset securities.
The SEC said Mr. Spallina also told Thomas J. Palermo, a
financial adviser at a brokerage firm, and Brian H. Markowitz, his
next-door neighbor at the time, about the potential deal with
Gilead, a pharmecuetical company whose drugs include Hepatitis C
treatment Sovaldi. Both then bought shares based on Mr. Spallina's
tips, the SEC said.
After Gilead announced its deal on Nov. 21, 2011, the price of
Pharmasset's stock shot up 84%. The defendants sold off their
holdings, making over $234,000 in illegal profits, the SEC
said.
The defendants have collectively agreed to pay about $489,000 to
settle the charges. The settlements are subject to court
approval.
Mr. Spallina's attorney declined to comment. Attorneys for
Messrs. Tescher, Rosen, Palermo and Markowitz couldn't immediately
be reached for comment.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 28, 2015 13:28 ET (17:28 GMT)
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