On August 2, 2012, the Securities and Exchanges Commission ("SEC") charged an executive in the treasury department at Bristol-Myers Squibb with insider trading. The Complaint filed in the United States District Court of New Jersey alleges that Robert D. Ramnarine made more than $300,000 in illegal profits by misusing nonpublic information he obtained while helping Bristol-Myers Squibb evaluate whether to acquire three other pharmaceutical companies (Pharmasset Inc., Amylin Pharmaceuticals Inc., and ZymoGenetics Inc.).
The SEC alleged that Ramnarine used multiple personal brokerage accounts to illegally trade in stock options of these potential target companies. The SEC further alleged that, prior to his trading, Ramnarine conducted Internet research from his office computer to determine whether he could be detected by regulators -searching for such phrases as “can stock option be traced to purchaser” and “illegal insider trading options trace” and viewing such articles as “Ways to Avoid Insider Trading.” “Ramnarine tried to educate himself about how the SEC investigates insider trading so he could avoid detection, but apparently he ignored countless successful SEC enforcement actions against similarly ill-motivated individuals who paid a heavy price for their illegal trading,” said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit.
The SEC is seeking a court order to freeze Ramnarine’s brokerage account assets. The U.S. Attorney’s Office for the District of New Jersey announced that it is pursuing a parallel criminal action and the arrest of Ramnarine.