David R. Chase, P.A.
Call Us Now: 800-760-0912
Call Us Now: 800-760-0912
The biotechnology and pharmaceutical sectors are among the most heavily scrutinized industries by the U.S. Securities and Exchange Commission (SEC). With billions of dollars riding on clinical trial outcomes, FDA approval decisions, and drug development milestones, the SEC views these companies as potential hotspots for illegal insider trading and securities fraud. If you are an executive, scientist, data analyst, investor or consultant under SEC investigation for insider trading, or any securities-related offense in the biotech or pharmaceutical space, retaining the seasoned and knowledgeable legal counsel is critical.
David R. Chase, Esq., a nationally recognized SEC defense attorney, is here to help. As a former SEC prosecutor, David Chase brings invaluable experience and strategic insight to clients facing SEC investigations, particularly including those involving insider trading. Since leaving the SEC, he has dedicated his private practice for the last 25 years to zealously defending individuals and companies targeted by the SEC, including those in the biotech and pharma space.
The biotechnology and pharmaceutical industries are unique in that specific milestone events can instantly cause dramatic stock price fluctuations. That volatility, while attractive to investors, also raises red flags for securities regulators.
Here are key triggers that often lead to SEC insider trading investigations:
The SEC has brought numerous, high-profile enforcement actions in the biotechnology and pharmaceutical industries. These investigations often result in civil charges and, in some cases, criminal prosecutions. Several landmark biotech insider trading cases include:
One of the most infamous biotech insider trading cases, the ImClone scandal, involved the company’s then-CEO Samuel Waksal and high-profile investors, including Martha Stewart. The investigation centered on trades made just before the FDA announced it would not review ImClone’s application for its cancer drug Erbitux. Waksal was sentenced to more than seven years in prison, and Stewart faced criminal charges not for insider trading, but rather for obstruction and false statements, leading to a five-month prison term.
In 2020, the SEC investigated unusual trading activity surrounding Biogen Inc. just before the company publicly announced surprising results for its Alzheimer’s drug, aducanumab. While not all SEC investigations result in charges, the Biogen case exemplifies how the SEC utilizes sophisticated tools, including algorithms and surveillance technology, to detect suspicious trading patterns in relation to biotech announcements.
In 2016, a former Gilead Sciences executive was charged with tipping a friend about impending acquisitions. The friend traded on the information, resulting in millions of dollars in profit. This case highlights the SEC’s aggressive pursuit of both tippers and tippees in the biotech sector.
These cases demonstrate that insider trading in biotech isn’t limited to CEOs. Mid-level employees, consultants, friends, and even family members who are recipients of material, non-public information can come under SEC scrutiny and, potentially, face charges.
Insider trading is generally defined as buying or selling a security while in possession of material, nonpublic information in breach of a fiduciary duty or other relationship of trust and confidence. It can also involve “tipping” such information to others who then trade on it.
Under U.S. law, insider trading can lead to:
Because the insider trading laws are complex and less than clear due to evolving case law and the absence of an explicit statutory prohibition, effectively defending an SEC investigation requires years of experience, knowledge of the federal securities laws, and creative, strategic thinking.
The moment you become aware that you are under SEC investigation, your next steps are critical. Whether you received a subpoena, a Wells Notice, or informal inquiry, you need legal representation from someone who knows how the SEC thinks, investigates, prosecutes and settles its cases.
David R. Chase, Esq. is a seasoned SEC defense attorney who offers clients the unique advantage of having worked inside the SEC as a Senior Counsel in the Division of Enforcement. He knows the SEC’s enforcement tactics, evidentiary thresholds, and how to effectively diffuse an investigation or negotiate a favorable settlement for his clients.
Based in South Florida, David’s represents clients nationwide, including corporate executives, compliance officers, scientists, and investors in the biotech and pharmaceutical industries.
If you are under investigation by the SEC for insider trading or other securities violations related to the biotech or pharmaceutical industry, time is of the essence. SEC cases are highly disruptive, damaging to careers, and can result in lifelong financial and reputational harm if not properly and timely handled.
Whether you are responding to a SEC subpoena, Wells Notification or worried about potential regulatory enforcement exposure, David Chase is ready to strategically navigate you through this stressful process with the goal of avoiding charges.
Call David R. Chase, P.A. today at 800-760-0912 to schedule a confidential consultation, or email him directly at: david@davidchaselaw.com.
You can also visit www.securitiesfrauddefense.net for more information about David Chase’s extensive securities law background, his articles and blogs, television interviews and prior successful results.
